Order Code RL32109
Navy DDG-1000 and DDG-51 Destroyer Programs:
Background, Oversight Issues, and
Options for Congress
Updated August 8, 2008
Ronald O’Rourke
Specialist in Naval Affairs
Foreign Affairs, Defense, and Trade Division

Navy DDG-1000 and DDG-51 Destroyer Programs:
Background, Oversight Issues, and
Options for Congress
Summary
At a July 31, 2008, hearing before the Seapower and Expeditionary Forces
subcommittee of the House Armed Services Committee, Navy officials announced
a major change in the service’s position on what kind of destroyers it wants to
procure over the next several years: The Navy officials testified that the service no
longer wants to procure additional Zumwalt (DDG-1000) class destroyers, and
instead now wants to restart procurement of Arleigh Burke (DDG-51) destroyers.
Prior to changing its position, the Navy had wanted to continue procuring DDG-
1000s, and did not want to procure any more DDG-51s. Navy plans had called for
procuring a total of seven DDG-1000s. The first two were procured in FY2007, and
the Navy’s proposed FY2009 budget, submitted to Congress in February 2008,
requested funding for a third. The three DDG-51s procured in FY2005 were to have
been the final ships in the DDG-51 program, and Navy budgets since FY2006 have
included funding for closing out the DDG-51 program. Until the July 31 hearing, the
Navy for several years had stressed the need for procuring additional DDG-1000s,
defended the DDG-1000 program against various criticisms, and rejected proposals
for stopping DDG-1000 procurement and for resuming procurement of DDG-51s.
The issue for Congress is how to take the Navy’s new position on destroyer
procurement into account in marking up the Navy’s proposed FY2009 budget.
Although the Navy’s proposed budget requests funding for procuring a third DDG-
1000, Navy officials suggested at the July 31 hearing that they would now prefer
Congress to instead fund the procurement of a DDG-51 in FY2009.
Potential oversight issues for Congress regarding the Navy’s new position on
destroyer procurement include the timing of the announcement of the new position,
the availability of the analytical basis for the Navy’s new position, the Navy’s
changed threat assessment, the Navy’s selection of the DDG-51 as the ship best
suited to meeting the new capability requirements resulting from the changed threat
assessment, the Navy’s description of the DDG-1000’s anti-air warfare (AAW)
capabilities, and the industrial-base implications of stopping DDG-1000 procurement
and restarting DDG-51 procurement.
Options for Congress include supporting the Navy’s new position, which could
involve, among other things, providing partial or full funding for the procurement of
a DDG-51 in FY2009; rejecting the Navy’s new position, which could involve,
among other things, providing partial or full funding for the procurement of a DDG-
1000 in FY2009; and adopting an intermediate position, which could involve, among
other things, providing partial or full funding for the procurement of either a DDG-51
or DDG-1000 destroyer in FY2009, with the choice to be made by the Navy.
This report will be updated as events warrant.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Zumwalt (DDG-1000) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Arleigh Burke (DDG-51) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Surface Combatant Construction Industrial Base . . . . . . . . . . . . . . . . . . . . . 6
Planned Surface Combatant Force Structure . . . . . . . . . . . . . . . . . . . . . . . . . 7
Navy’s New Position on Destroyer Procurement . . . . . . . . . . . . . . . . . . . . . 7
Oversight Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Timing of Announcement of Navy’s New Position . . . . . . . . . . . . . . . . . . . 14
Availability of Analytical Basis for Navy’s New Position . . . . . . . . . . . . . 14
Navy’s Changed Threat Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Navy’s Selection of DDG-51 to Meet New Requirements . . . . . . . . . . . . . 16
Navy’s Description of DDG-1000 AAW Capabilities . . . . . . . . . . . . . . . . . 18
Industrial Base Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Options For Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Legislative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
FY2009 Defense Authorization Bill (H.R. 5658/S. 3001) . . . . . . . . . . . . . . 25
FY2009 Defense Appropriations Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appendix A. Additional Background Information on DDG-1000 Program . . . . 27
Origin of Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Acquisition Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Procurement Cost Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix B. Navy Testimony for July 31, 2008, Hearing . . . . . . . . . . . . . . . . . 31
Appendix C. Ship Design Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
DDG-51 Design Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
DDG-1000 Design Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Non-combat Adjunct Ship with Powerful Radar . . . . . . . . . . . . . . . . . . . . . 48
Modified CG-47s with Improved Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
LPD-17 Hull Equipped with AGSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Appendix D. DDG-1000 Oversight Issues for Congress . . . . . . . . . . . . . . . . . . . 50
Accuracy of Navy Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Program Affordability and Cost Effectiveness . . . . . . . . . . . . . . . . . . . . . . 53
Technical Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
DDG-1000 Mission Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Appendix E. Comparisons of DDG-1000 and DDG-51 . . . . . . . . . . . . . . . . . . . 62
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
July 19, 2005, Navy Testimony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
June 10, 2005, Navy Briefing to CRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
April 10, 2008, Navy Briefing to CRS and CBO . . . . . . . . . . . . . . . . . . . . . 67

May 7, 2008, Navy Letter to Senator Kennedy . . . . . . . . . . . . . . . . . . . . . . 68
July 2, 2008, DOD letter to Representative Taylor . . . . . . . . . . . . . . . . . . . 70
List of Tables
Table 1. DDG-1000 Program Funding, FY2002-FY2013 . . . . . . . . . . . . . . . . . . 4
Table 2. Destroyer Procurement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 3. CBO Estimates of Costs for Procuring DDG-1000s or DDG-51s . . . . 18
Table 4. Congressional Action on FY2009 Funding Request . . . . . . . . . . . . . . 24
Table 5. DDG-1000 and DDG-51 Annual O&S Costs . . . . . . . . . . . . . . . . . . . . 42
Table 6. 1997 Navy Information on DDG-51 Variants . . . . . . . . . . . . . . . . . . . 45
Table 7. DDG-1000 Capabilities Relative to DDG-51 Capabilities . . . . . . . . . . 68

Navy DDG-1000 and DDG-51 Destroyer
Programs: Background, Oversight Issues,
and Options for Congress
Introduction
At a July 31, 2008, hearing before the Seapower and Expeditionary Forces
subcommittee of the House Armed Services Committee, Navy officials announced
a major change in the service’s position on what kind of destroyers it wants to
procure over the next several years: The Navy officials testified that the service no
longer wants to procure additional Zumwalt (DDG-1000) class destroyers, and
instead now wants to restart procurement of Arleigh Burke (DDG-51) destroyers.
The Navy’s testimony confirmed press articles that began appearing in mid-July that
had reported the Navy’s change in position.1
Prior to changing its position, the Navy had wanted to continue procuring DDG-
1000s, and did not want to procure any more DDG-51s. Navy plans had called for
procuring a total of seven DDG-1000s. The first two were procured in FY2007, and
the Navy’s proposed FY2009 budget, submitted to Congress in February 2008,
requested funding for a third. The three DDG-51s procured in FY2005 were to have
been the final ships in the DDG-51 program, and Navy budgets since FY2006 have
included funding for closing out the DDG-51 program. Until the July 31 hearing, the
Navy for several years had stressed the need for procuring additional DDG-1000s,
defended the DDG-1000 program against various criticisms, and rejected proposals
for stopping DDG-1000 procurement and for resuming procurement of DDG-51s.
1 See for example, Christopher J. Castelli, “In Major Reversal, Navy Aims To Curtail DDG-
1000 Destroyer Program,” Inside the Navy, July 14, 2008; Christopher P. Cavas, “DDG
1000 Destroyer Program Facing Major Cuts,” DefenseNews.com, July 14, 2008; Dale
Eisman, “Cost and Design Bugs Could Sink New Destroyer Program,” Norfolk Virginian-
Pilot
, July 20, 2008; Christopher P. Cavas, “DDG 1000 Faces More Uncertainty,” Defense
News
, July 21, 2008; Christopher J. Castelli, “Plan To Curtail DDG-1000 Program
Advances,” InsideDefense.com, July 22, 2008; Christopher P. Cavas, “DDG 1000 Program
Will End At Two Ships,” DefenseNews.com, July 22, 2008; Geoff Fein, “Navy Ready To
Propose Limiting DDG-1000 But At Two,” Defense Daily, July 23, 2008; Bettina H.
Chavanne, “U.S. Navy Cancels DDG-1000 Destroyer,” Aerospace Daily & Defense Report,
July 24, 2008; Megan Scully, “Navy to Cancel New Destroyer Program and Buy Older
Model,” CongressDaily, July 24, 2008; Tony Capaccio, “U.S. navy Confirms Plans to
Curtail Construction of Destroyers,” Bloomberg News, JULY 24, 2008; Robert Weisman
and Bryan Bender, “Navy Cancels $20B Purchase Of Destroyers,” Boston Globe, July 24,
2008: 1; August Cole, “Budget Pressures Weigh On Navy,” Wall Street Journal, July 24,
2008: 2; Geoff Fein, “Navy To Buy Eight DDG-51s As It Cancels Further Zumwalt Buys,”
Defense Daily, July 25, 2008.

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The issue for Congress is how to take the Navy’s new position on destroyer
procurement into account in marking up the Navy’s proposed FY2009 budget.
Although the Navy’s proposed budget requests funding for procuring a third DDG-
1000, Navy officials suggested at the July 31 hearing that they would now prefer
Congress to instead fund the procurement of a DDG-51 in FY2009.
This report provides background information on the DDG-1000 and DDG-51
programs and the Navy’s new position on destroyer procurement, discusses several
potential oversight issues arise from the Navy’s new position, and presents potential
options for Congress on the issue.
Background
Zumwalt (DDG-1000) Program
The Navy initiated the DDG-1000 program in the early 1990s under the name
DD-21, which meant destroyer for the 21st Century. In November 2001, the program
was restructured and renamed the DD(X) program, meaning a destroyer whose
design was in development. In April 2006, the program’s name was changed again,
to DDG-1000, meaning a guided missile destroyer with the hull number 1000. The
first DDG-1000 is to be named the Zumwalt, so the program is also referred to as the
Zumwalt-class program.
The DDG-1000 is a multimission destroyer with an emphasis on naval surface
fire support (NSFS) and littoral (i.e., near-shore) operations. The DDG-1000 was
intended in part to replace, in a technologically more modern form, the large-caliber
naval gun fire capability that the Navy lost when it retired its Iowa-class battleships
in the early 1990s.2 The DDG-1000 was also intended to improve the Navy’s general
capabilities for operating in defended littoral waters, to introduce several new
technologies that would be available for use on future Navy ships, and to serve as the
basis for the Navy’s planned next-generation cruiser, called the CG(X).3
The DDG-1000 is to have a reduced-size crew (compared with the Navy’s
current destroyers and cruisers) of 142 sailors so as reduce its operating and support
(O&S) costs. The ship is to incorporate a significant number of new technologies,
including a wave-piercing, tumblehome hull design for reduced detectability,4 a
superstructure made partly of large sections of composite materials rather than steel
2 The Navy in the 1980s reactivated and modernized four Iowa (BB-61) class battleships that
were originally built during World War II. The ships reentered service between 1982 and
1988 and were removed from service between 1990 and 1992.
3 For more on the CG(X) program, see CRS Report RL34179, Navy CG(X) Cruiser
Program: Background, Oversight Issues, and Options for Congress
, by Ronald O’Rourke.
4 A tumblehome hull slopes inward, toward the ship’s centerline, as it rises up from the
waterline, in contrast to a conventional flared hull, which slopes outward as it rises up from
the waterline.

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or aluminum, an integrated electric-drive propulsion system,5 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 vertical launch system (VLS)
for storing and firing missiles, and two copies of a 155mm gun called the Advanced
Gun System (AGS). The AGS is to fire a new rocket-assisted 155mm shell, called
the Long Range Land Attack Projectile (LRLAP), to ranges of more than 60 nautical
miles. The DDG-1000 can carry 600 LRLAP rounds (300 for each gun), and
additional rounds can be brought aboard the ship while the guns are firing, creating
what Navy officials call an “infinite magazine.”
With an estimated full load displacement of 14,987 tons, the DDG-1000 design
is roughly 55% 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 first two DDG-1000s were procured in FY2007 using split funding (i.e.,
two-year incremental funding) in FY2007 and FY2008. The Navy estimates their
combined procurement cost at $6,325 million. The Navy’s proposed FY2009 budget
requested funding to procure the third DDG-1000; the Navy estimated its
procurement cost at $2,653 million. The third DDG-1000 received $150 million in
advance procurement funding in FY2008, and the Navy’s proposed FY2009 budget
requested the remaining $2,503 million. The Navy’s proposed FY2009 budget also
requested $51 million in advance procurement funding for the fourth DDG-1000,
which the Navy budget plans called for procuring in FY2010.
Table 1 shows DDG-1000 funding through FY2013, as presented in the
FY2009-FY2013 Future Years Defense Plan (FYDP) submitted in February 2008.
As discussed in the notes to the table, the table does not show about $1.1 billion in
research and development funding provided for the predecessor DD-21 program from
FY1995 through FY2001, or funding for DDG-1000 research and development costs
planned for fiscal years after FY2013, or $513 million in outfitting and post-delivery
costs planned for fiscal years after FY2013.
As can be seen in the table, when the $1.1 billion in FY1995-FY2001 research
and development costs are included, the DD-21/DD(X)/DDG-1000 program received
a total of about $13,385 million in funding from FY1995 through FY2008. This total
includes about $6,911 million in research and development funding, and about
$6,474 million in procurement funding.
5 For more on integrated electric-drive technology, see CRS Report RL30622, Electric-Drive
Propulsion for U.S. Navy Ships: Background and Issues for Congress
, by Ronald O’Rourke.

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Table 1. DDG-1000 Program Funding, FY2002-FY2013
(millions of then-year dollars, rounded to nearest million; totals may not add due
to rounding)
FY02
Total
thru FY 07 FY08 FY09 FY10
FY11
FY12
FY13
thru
FY06
FY13
Research, Development, Test and Evaluation, Navy (RDTEN) account
DDG-1000a
4549
756
493
449
521
565
326
174
7832
Shipbuilding and Conversion, Navy (SCN) account
DDG-1000 and
1010
2557
2757
0
0
0
0
0
6325b
DDG-1001
DD/NREb
994
893
0
0
0
0
0
0
1887b
Construction
16
1664
2757
0
0
0
0
0
4437b
DDG-1002
0
0
150 2503
0
0
0
0
2653
DDG-1003
0
0
0
51
2663
0
0
0
2714
DDG-1004
0
0
0
0
51
2377
0
0
2428
DDG-1005
0
0
0
0
0
50
2569
0
2619
DDG-1006
0
0
0
0
0
0
50
2347
2397
Outfitting/post-
0
0
0
0
16
61
87
132
295
delivery costsc
Subtotal SCN
1010
2557
2907 2554
2730
2488
2706
2479
19430
TOTAL
5559
3313
3399 3003
3250
3053
3032
2653
27262
Source: Navy data provided to CRS on May 8, 2008, and July 7, 2007.
a. DDG-1000 portion of Program Element (PE) 0604300N, DDG-1000 Total Ship System
Engineering (previously called SC-21 Total Ship System Engineering). PE0604300N
also includes funding the CG(X) cruiser program. Figures shown do not include
$1,111.4 million in RDTEN funding provided for DD-21/DD(X) program in FY1995-
FY2001. Additional RDTEN funding for the DDG-1000 program required after
FY2013. The Navy states that figure for RDTEN for FY2002-FY2006 does not
include congressional adds to PE0604300N during that period; budget-justification
documents show about $41 million in such additional funding in FY2006 and much
smaller amounts in FY2002-FY2005.
b. DD/NRE is detailed design/non-recurring engineering costs for the class. In Navy
shipbuilding programs, DD/NRE costs for a class of ships are traditionally included
in the procurement cost of the lead ship(s) in the class.
c. $513 million in additional outfitting/post-delivery costs programmed after FY2013.
As can be seen in the table, the Navy requested $449 million in FY2009
research and development funding for the DDG-1000 program. This $449 million
is included within $679 million that the Navy is requesting in FY2009 for a line item
(i.e., program element, or PE) in the Navy’s research and development account called
“DDG-1000 Total Ship System Engineering” (PE0604300N, the 100th line item in
the account). This line item was previously called “SC-21 Total Ship System
Engineering.” Although this line item is named for the DDG-1000 program, it
includes research and development funding for both the DDG-1000 and CG(X)

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programs. The other $230 million requested in this line item is for the CG(X)
program.6
Based on the figures in the table, when $1.1 billion in FY1995-FY2001 DD-
21/DD(X) research and development costs and $513 million in post-FY2013
outfitting and post-delivery costs are included, the Navy estimated the total
acquisition (i.e., development plus procurement) cost of a seven-ship DDG-1000
program at about $28.9 billion in then-year dollars, or an average of about $4.1
billion per ship, not including additional DDG-1000 research and development costs
after FY2013.
Several major technologies developed for the DDG-1000 are to be used on the
CG(X) cruiser and other future Navy ships, so at least some portion of the DDG-1000
program’s research and development costs might be viewed as not truly specific to
the DDG-1000 program. Based on the figures in the table, when the DDG-1000
program’s research and development costs are excluded, the Navy estimates the total
procurement cost of a seven-ship DDG-1000 program (including $513 million in
post-FY2013 outfitting and post-delivery costs) at about $19.9 billion in then-year
dollars, or an average of about $2.8 billion per ship.
For further background information on the DDG-1000 program, see Appendix
A.
Arleigh Burke (DDG-51) Program
The Arleigh Burke (DDG-51) program was initiated in the late 1970s with the
aim of developing a surface combatant to replace older destroyers and cruisers that
were projected to retire in the 1990s. The DDG-51 was conceived as an affordable
complement to the Navy’s Ticonderoga (CG-47) class cruisers that could be
procured, under projected budgets at the time, at a sustained annual rate of five ships
per year.
The DDG-51 design, like the CG-47, is a multimission destroyer with an
emphasis on air defense (which the Navy refers as anti-air warfare, or AAW) and
blue-water (mid-ocean) operations. DDG-51s, like CG-47s, are equipped with the
Aegis combat system, an integrated ship combat system named for the mythological
shield that defended Zeus. CG-47s and DDG-51s consequently are often referred to
as Aegis cruisers and Aegis destroyers, respectively, or collectively as Aegis ships.
The current version of the DDG-51 design, called the Flight IIA version, has a full
load displacement of about 9,500 tons, which is similar to that of the CG-47s.
The first DDG-51 was procured in FY1985, and a total of 62 were procured
through FY2005. The first ship entered service in 1991, a total of 52 were in service
as of the end of FY2007, and the 62nd is scheduled to enter service in 2011.
6 As discussed in a previous footnote, SC-21 means surface combatant for the 21st Century
and refers to the Navy’s pre-November 2001 SC-21 program to develop a destroyer called
the DD-21 (now called the DDG-1000) and an eventual cruiser called the CG-21 (now
called CG(X)).

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The DDG-51 design has been changed over time to incorporate various
improvements. The Flight IIA design, which was first procured in FY1994, was a
significant change that included, among other things, the addition of a helicopter
hangar. The Aegis system installed on new DDG-51s has been updated several
times, with the most recent DDG-51s being built with a version called Baseline 7.
Between 2004 and 2008, 15 DDG-51s (and also three CG-47s) have been
modified to receive an additional capability for ballistic missile defense (BMD)
operations. The modification for BMD operations includes, among other things, the
addition of a new software program for the Aegis combat system and the arming of
the ship with the SM-3, a version of the Navy’s Standard Missile that is designed for
BMD operations.7
The Navy has initiated a program for modernizing existing DDG-51s so as
maintain their mission and cost effectiveness out to the end of their projected 35-year
service lives.8 The Navy has also studied the option of extending the service lives of
DDG-51s from 35 years to 40 years, and has assumed a 40-year life for DDG-51s as
part of its 30-year shipbuilding plan for maintaining the Navy’s desired 313-ship
fleet.9 The Navy, however, has not yet funded a program to perform the additional
maintenance work that would be needed to extend the ships’ lives to 40 years.
Older CRS reports provide additional historical and background information on
the DDG-51 program.10
Surface Combatant Construction Industrial Base
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
Shipbuilding (NGSB).11 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
7 For more on Navy BMD programs, see CRS Report RL33745, Sea-Based Ballistic Missile
Defense — Background and Issues for Congress
, by Ronald O’Rourke
8 For more on this program, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.
9 For a discussion, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans:
Background and Issues for Congress
, by Ronald O’Rourke.
10 See CRS Report 94-343 F, Navy DDG-51 Destroyer Procurement Rate: Issues and
Options for Congress
, by Ronald O’Rourke. [April 25, 1994; out of print and available
directly from the author], and CRS Report 80-205 F, The Navy’s Proposed Arleigh Burke
(DDG-51) Class Guided Missile Destroyer Program: A Comparison With An Equal-Cost
Force Of Ticonderoga (CG-47) Class Guided Missile Destroyers
, by Ronald O’Rourke.
[November 21, 1984; out pf print and available directly from the author]
11 NGSB also includes the Avondale shipyard near New Orleans, Newport News
Shipbuilding of Newport News, VA, and a fourth facility, used for manufacturing ship
components and structures made from composites, at Gulfport, MS.

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Ingalls’ ship-construction work. Navy surface combatants are overhauled, repaired,
and modernized at GD/BIW, NGSB, other private-sector U.S. shipyards, and
government-operated naval shipyards (NSYs).
Lockheed Martin and Raytheon are generally considered the two leading Navy
surface ship radar makers and combat system integrators. Lockheed is the lead
contractor for the DDG-51’s combat system (the Aegis system), and Raytheon is the
lead contractor for the DDG-1000’s combat system. Lockheed has a share of the
DDG-100 combat system, and Raytheon has a share of the DDG-51 combat system.
The surface combatant industrial and technological base also includes hundreds
of additional firms that supply materials and components. Many of the suppliers for
the DDG-1000 program are not suppliers for the DDG-51 program, and vice versa.
The financial health of Navy shipbuilding 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.
Planned Surface Combatant Force Structure
Until the Navy’s testimony at the July 31, 2008, hearing, the Navy in coming
years had wanted to achieve and maintain, as part of its desired fleet of 313 ships,12
a force of 88 cruisers and destroyers, including 7 DDG-1000s, 19 CG(X)s, and 62
DDG-51s.
Navy’s New Position on Destroyer Procurement
The following discussion of the Navy’s new position on destroyer procurement
is based primarily on the Navy’s prepared statement for, and spoken testimony at, the
July 31, 2008, hearing on destroyer procurement before the Seapower and
Expeditionary Forces subcommittee of the House Armed Services Committee.13 The
Navy’s prepared statement for the hearing is reprinted in its entirety as Appendix B.
Number of New DDG-51s Proposed. How many DDG-51s does the Navy
now want to procure?
Table 2 below shows (in the upper half) the program of record for destroyer
procurement from the FY2009 budget submission and (in the lower half) the Navy’s
new proposal for destroyer procurement as described at the July 31 hearing.
12 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.
13 Statement of Vice Admiral Barry McCullough, Deputy Chief of Naval Operations for
Integration of Capabilities and Resources, and Ms. Allison Stiller, Deputy Assistant
Secretary of the Navy (Ship Programs), before the Subcommittee on Seapower and
Expeditionary Forces of the House Armed Services Committee, on Surface Combatant
Requirements and Acquisition Strategies, July 31, 2008, 11 pp., and the spoken remarks of
McCullough and Stiller, as reflected in the transcript of the hearing.

CRS-8
Table 2. Destroyer Procurement Plans
(FY2007-FY2015)
07
08
09
10
11
12
13
14
15
Program of record from FY2009 budget submission
DDG-51
DDG-1000
2a
1
1
1
1
1
CG(X)
1
1
1
2
Navy’s proposed new plan, based on Navy’s July 31 testimony
DDG-51
1
1
2
1
2
1
1
DDG-1000
2a
CG(X)
1?
Sources: FY2009 budget submission, Navy testimony at July 31, 2008 hearing before
Seapower and Expeditionary Forces subcommittee of House Armed Services Committee,
and press reports
a. Two ships procured in FY2007 using split funding (incremental funding) in FY2007 and
FY2008.
As shown in the table, the Navy now wants to procure a total of eight DDG-51s
in the period FY2010-FY2015. The Navy testified that this is the profile the service
has proposed to the Office of the Secretary of Defense (OSD) for approval as part of
the process for preparing the proposed Department of Defense (DOD) FY2010
budget to be submitted to Congress in early 2009.
The Navy indicated at the July 31 hearing that for FY2009, it would prefer to
procure a DDG-51 rather than a third DDG-1000. Including a DDG-51 in FY2009
would make for a proposed total of nine DDG-51s in the period FY2009-FY2015.
Procuring a DDG-51 in FY2009 is apparently not part of the Navy’s recent proposal
to OSD, because that proposal relates to the period FY2010-FY2015. The Navy may
be constrained in its ability to ask explicitly in public for procurement of a DDG-51
rather than a DDG-1000 in FY2009, because the proposed FY2009 budget includes
a request for funding for the procurement of a third DDG-1000 and the Navy is
obligated to defend the administration’s proposed FY2009 budget while it is being
considered by Congress. The Navy testified on July 31 that it remains ready to
execute construction of a third DDG-1000, should a third DDG-1000 be funded in
FY2009.
The FY2015 date shown in Table 2 for procurement of the lead CG(X) under
the Navy’s proposed new plan is somewhat speculative. It has been reported that the
date for procuring the lead CG(X) cruiser may slip from the currently planned year
of FY2011 to FY2015 or later.14 The fact that the Navy is proposing to procure one
DDG-51 (rather than two) in FY2015 suggests (but does not prove) that the Navy
now plans to procure the lead CG(X) in FY2015, since that would result in a total
procurement of two surface combatants (one DDG-51 and one CG(X)) in FY2015.
14 Christopher P. Cavas, “DDG 1000 Destroyer Program Facing Major Cuts,”
DefenseNews.com, July 14, 2008.

CRS-9
If the procurement date for the lead CG(X) slips to FY2016, FY2017, or FY2018, the
Navy may elect to procure DDG-51s in those years as well, which would increase the
total number of DDG-51s procured under the Navy’s new proposal.
Construction of DDG-1000s. What are the Navy’s plans regarding the two
DDG-1000s procured in FY2007?
The Navy testified that it wants to go ahead with the construction of the two
DDG-1000s procured in FY2007, and with DDG-1000 research and development
work, which is needed to support the construction of the two DDG-1000s and to
make DDG-1000 technologies available for use in future Navy ships. This is why
the Navy refers to the DDG-1000 program as being truncated at two ships, rather
than canceled or terminated.
Navy’s Reasons for Its Change in Position. Why did the Navy change
its position on destroyer procurement?
The Navy testified that it has changed its position on destroyer procurement
primarily because of a recent change in its assessment of likely future threats to Navy
forces. This change in the threat assessment, Navy officials testified, led to a
corresponding change in capability requirements for Navy destroyers to be procured
over the next few years.
The Navy testified that, over the last two years, its assessment of threats posed
by ballistic missiles, anti-ship cruise missiles (ASCMs), and modern non-nuclear-
powered submarines operating in blue waters has increased. The Navy’s prepared
statement and spoken testimony at the July 31 hearing include multiple references to
ballistic missiles, ASCMs (including the proliferation of ASCMs to non-state actors
such as the Hezbollah organization, which fired a Chinese-made C-802 ASCM at an
Israeli corvette in July 2006, killing four sailors and damaging the ship), and modern
non-nuclear-powered submarines capable of blue-water operations.15 The Navy also
testified that it now believes it has more than enough capacity, as a result aircraft-
delivered precision-guided munitions and Tomahawk cruise missiles, to meet
requirements for providing fire support for forces ashore.
Navy officials testified that, as a result its changed threat assessment, the Navy
now needs to use destroyer procurement over the next several years to improve the
fleet’s capabilities for BMD, AAW, and blue-water antisubmarine warfare (ASW).
Navy officials testified that while the DDG-1000 is well-suited for NSFS and for
operations in littoral waters, it is not capable of area-defense AAW16 or BMD
15 For a press article discussing what adversary weapons the changed threat environment
might include, see Christopher P. Cavas, “Missile Threat Helped Drive DDG Cut,” Defense
News
, August 4, 2008: 1.
16 An area-defense AAW system is capable of defending not only the ship on which it is
installed, but other ships in the area as well. An AAW system capable of defending only the
ship on which it is installed is referred to as a point-defense AAW system. Area-defense
AAW systems generally can intercept aircraft and antis-ship cruise missiles at longer ranges
(continued...)

CRS-10
operations, and its sonar system is not optimized for blue-water ASW operations.
Navy officials also testified that modifying the DDG-1000 design to make it capable
of these operations would be unaffordable from the Navy’s perspective. The DDG-
51 design, they testified, is capable of BMD and area-defense AAW operations, and
its sonar is optimized for blue-water ASW operations. Consequently, the Navy
testified, the DDG-51 is better suited than the DDG-1000 for meeting the Navy’s
changed capability requirements for destroyers to be procured over the next several
years.
Although the Navy at one point in its spoken testimony stated that affordability
was not a factor behind its new position, cost considerations appear to have played
some role in the Navy’s thinking:
! The Navy’s testimony makes reference to having enough “capacity”
to meet regional combatant commander demands for surface
combatants for maintaining day-to-day forward deployments and
participating in engagement activities with other countries.
“Capacity” is a term usually used to refer to the quantity of
something (as opposed to “capability,” which usually refers to the
kinds of things that something can do). The Navy’s use of the term
“capacity” suggests that the service has concluded that procuring
DDG-51s instead of DDG-1000s will permit the Navy to procure a
larger number of destroyers over the next several years.
! The Navy also testified that “production costs of DDG 51s are
known,” that “the costs associated with DDG 51 class shipbuilding
are well understood,” and that the procurement cost of the DDG-51
is “quantifiable.” The Navy did not make the same statements about
the DDG-1000. This suggests that the Navy believes that the
procurement cost of the DDG-51 is known with better confidence
than the procurement cost of the DDG-1000, and consequently that
procuring DDG-51s would consequently pose less risk of cost
growth than procuring DDG-51s.
! As stated earlier, the Navy testified that the option of modifying the
DDG-1000 design so as to give it a capability for BMD and area-
defense AAW, and to improve its capability for blue-water ASW, “is
unaffordable from the Navy’s standpoint.”
Potential Relationship to CG(X) Developments. How might the Navy’s
new position on destroyer procurement relate to the CG(X) program?
16 (...continued)
than point-defense AAW systems. U.S. Navy ships need to be able to use the SM-2
interceptor to be considered capable of area-defense AAW operations. Navy ships that can
fire only shorter-ranged interceptors, such as the Enhanced Sea Sparrow Missile (ESSM)
or the Rolling Airframe Missile (RAM), are considered capable of point-defense AAW
operations only. The Navy testified on July 31 that the DDG-1000 as currently design
cannot successfully employ the SM-2.

CRS-11
Although the Navy did not say so at the July 31 hearing, developments in the
CG(X) program may be an additional factor behind the Navy’s decision to change its
position on destroyer procurement. The Navy originally wanted to use the DDG-
1000 hull design as the basis for the CG(X) design, because doing so would
minimize CG(X) hull-design costs and take advantage of the DDG-1000 production
learning curve to reduce recurring CG(X) production costs. The potential for reusing
the DDG-1000 hull in the CG(X) program was one of the Navy’s arguments in
previous years for moving ahead with DDG-1000 procurement.
It is not clear, however, that the Navy still considers the DDG-1000 hull as the
best hull design for the CG(X):
! A July 2, 2008, letter from John Young to Representative Gene
Taylor, the chairman of the Seapower and Expeditionary Forces
subcommittee of the House Armed Services Committee, stated: “I
agree that the Navy’s preliminary design analysis for the next-
generation cruiser indicates that, for the most capable radar suites
under consideration [for the CG(X)], the DDG-1000 [hull design]
cannot support the radar.”17
! The CG(X) may be a nuclear-powered ship, and it is not clear that
the DDG-1000 can accommodate one-half of the twin-reactor plant
that the Navy has designed for its new Gerald R. Ford (CVN-78)
class nuclear-powered aircraft carriers.18 If the DDG-1000 hull
cannot accommodate one-half of the Ford-class plant, then the Navy
might have judged that designing a new hull for the CG(X) that can
accommodate one-half of the Ford-class plant would cost less or
pose less technical risk than designing a new reactor plant that can
fit into the DDG-1000 hull.
If the Navy no longer considers the DDG-1000 hull as the best hull design for
the CG(X), that might have removed a reason for the Navy to support continued
procurement of the DDG-1000.
In addition, as mentioned earlier, the date for procuring the lead CG(X)
reportedly has slipped from FY2011 to FY2015 or later. The CG(X) is intended to
provide the fleet with improved AAW and BMD capabilities. If the date for
procuring the lead CG(X) has slipped several years, this may have made it more
necessary in the minds of Navy leaders to use procurement of destroyers over the
next few years to begin achieving that goal.
Design of New DDG-51s. What version of the DDG-51 does the Navy want
to procure?
17 Letter dated July 2, 2008 from John Young to Representative Taylor, p. 1.
18 For more on the CVN-78 program, see CRS Report RS20643, Navy Ford (CVN-78) Class
Aircraft Carrier Program: Background and Issues for Congress
, by Ronald O’Rourke.

CRS-12
The Navy testified that the DDG-51s it wants to procure in coming years would
be Flight IIA ships with a combat system essentially the same as the one that existing
DDG-51s are being given under the DDG-51 modernization program.
In describing the DDG-51’s capabilities at the July 31 hearing, the Navy stated
that the ship’s ASW equipment included, among other things, a towed array sonar.
A towed array sonar was part of the Flight I and Flight II DDG-51 designs, but was
removed from the Flight IIA design. The suggestion from the Navy’s testimony is
that the new Flight IIA ships that the Navy wants to procure would include a towed
array sonar.
The Navy’s testimony suggests that the new DDG-51s that the Navy wants to
procure would not only have the potential for being made capable of BMD
operations, but in fact would receive that capability. If so, then the Navy’s proposal
for procuring new DDG-51s would imply an expansion of the current program of
record for Navy BMD platforms, which currently calls for 18 Aegis ships (3 cruisers
and 15 destroyers) to be equipped for BMD operations.
CRS testimony at the July 31 hearing discussed several options for modifying
the design of the DDG-51s that would be procured under the Navy’s proposal so as
to reduce the ships’ O&S costs, or equip each ship with an AGS or additional
missile-launch tubes or an improved radar.19 The Navy’s testimony at the July 31
hearing indicated that the Navy is not contemplating procuring DDG-51s with such
design modifications.
Procurement Cost of New DDG-51s. What would the new DDG-51s cost
to procure?
The Navy’s prepared statement for the July 31 hearing states:
Given the truncation of the DDG 1000 program at two ships, the Navy
estimate for procurement of a single DDG 51 class ship in FY 2009 is $2.2
billion. This estimate utilizes the latest audited Forward Pricing Rate
Agreements (FPRAs) rates. Impacts for [DDG-51] production line restart and
contractor furnished equipment/government furnished equipment obsolescence
are included. The Navy has not finalized the acquisition strategy for a FY 2009
DDG 51 and follow-on procurements.20
Admiral Gary Roughead, the Chief of Naval Operations (CNO), in a letter to
Senator Edward Kennedy dated May 7, 2008, stated that:
19 Statement of Ronald O’Rourke, Specialist in Naval Affairs, Congressional Research
Service, before the House Armed Services Committee Subcommittee on Seapower and
Expeditionary Forces hearing on Surface Combatant Warfighting Requirements and
Acquisition Strategy, July 31, 2008, pp. 2-11.
20 Statement of Vice Admiral Barry McCullough, Deputy Chief of Naval Operations for
Integration of Capabilities and Resources, and Ms. Allison Stiller, Deputy Assistant
Secretary of the Navy (Ship Programs), before the Subcommittee on Seapower and
Expeditionary Forces of the House Armed Services Committee, on Surface Combatant
Requirements and Acquisition Strategies, July 31, 2008, p. 8.

CRS-13
without firm contracts for future ships of either [the DDG-1000 or DDG-51]
class, we are only able to provide a best estimate of the costs we would incur in
either of these programs. Since we are phasing out production of the DDG 51
class, there would be start-up costs associated with returning this line to
production. As a result, the estimated end cost to competitively procure a lead
DDG-51 (Flight IIa — essentially a repeat of the final ships currently undergoing
construction) in Fiscal Year (FY) 2009 assuming a truncation of the DDG 1000
class after the two lead ships would be either $2.2B for a single ship or $3.5B for
two lead ships (built at competing production yards). This estimate is based on
a Profit Related to Offer (PRO) acquisition strategy. The average cost of
subsequent DDG 51 Flight IIa class ships would be about $1.8B (FY09) per ship
compared to the $2.6B estimated cost of subsequent DDG 1000 class ships.21
Status of Navy Proposal within OSD. Has the Navy’s new proposal been
approved by OSD?
At a July 22, 2008, meeting between senior OSD and Navy officials, OSD
agreed to allow the Navy to begin briefing its proposal to Congress, but did not grant
its approval for the proposal. John Young, the DOD acquisition executive (the Under
Secretary of Defense for Acquisition, Technology and Logistics), reserved judgment
on the Navy’s proposal at the time, stating on July 24 that “more analysis and
discussion was necessary before there was agreement.”22 Earlier in this decade,
Young was the Navy’s acquisition executive (the Assistant Secretary of the Navy for
Research, Development and Acquisition), during which time he was a principal
figure in restructuring the DD-21 program into the DD(X) program and in defending
the DD(X) program against various criticisms. Since April 2008, Young has publicly
defended the DDG-1000 program and expressed skepticism about the cost
effectiveness of stopping DDG-1000 procurement and restarting DDG-51
procurement.23
Oversight Issues for Congress
The Navy’s new position on destroyer procurement raises several potential
oversight issues for Congress, including but not necessarily limited to those discussed
below.
21 Source: Letter dated May 7, 2008, from Admiral G. Roughead to the Honorable Edward
M. Kennedy, posted on the Internet at InsideDefense.com (subscription required) on May
30, 2008.
22 See, for example, Tony Capaccio, “U.S. Navy Confirms Plans to Curtail Construction of
Destroyers,” Bloomberg News, July 24, 2008; Christopher J. Castelli, “Navy Admits Plan
to Truncate DDG-1000 At Two Hulls As DOD Hedges,” Inside the Navy, July 28, 2008;
Christopher P. Cavas, “DDG Question Remains Open in Congress, DoD,” Defense News,
July 28, 2008: 4; and Emelie Rutherford, “Pentagon Seeks Info On Navy Destroyer Shift,
Senators Suggest Holding Funds,” Defense Daily, July 28, 2008.
23 See, for example, Bettina H. Chavanne, “Pentagon Acquisition Chief’s memo Points to
Value of DDG-1000,” Aerospace Daily & Defense Report, July 29, 2008.

CRS-14
Timing of Announcement of Navy’s New Position
One potential oversight issue for Congress concerns the timing of the Navy’s
announcement its change in position on destroyer procurement. The announcement
came well after the submission of the Navy’s proposed FY2009 budget and the
spring budget-review hearings held by the House and Senate Armed Services
committees and the Defense subcommittees of the House and Senate Appropriations
Committees. A potential oversight question for Congress is, Why did the Navy not
announce its changed position prior to the budget submission, or at least the spring
budget-review hearings?
Availability of Analytical Basis for Navy’s New Position
A second potential oversight issue concerns the availability of the analytical
basis for the Navy’s new position on destroyer procurement. The Navy testified at
the July 31 hearing that the service’s new position is based on an analysis performed
in the Assessment division (N81) of the Navy’s Resources, Requirements and
Assessments office (N8). As of July 31, the Navy had not shared the analysis with
at least some of the Members present at the hearing, who asked to see the analysis.
Potential oversight questions for Congress include the following:
! When does the Navy intend to share its analysis with Members of
Congress or congressional staff who have not yet seen it?
! When was the analysis performed, and what DOD offices, industry,
or parts of the Navy other than N81 participate in the analysis?
Navy’s Changed Threat Assessment
A third potential oversight issue for Congress concerns the Navy’s changed
threat assessment. Potential oversight questions for Congress include the following:
! What are the specific developments over the last two years
concerning ballistic missiles, ASCMs, and submarines that caused
the Navy to alter its threat assessment? (The Navy indicated at the
July 31 hearing that it could discuss this matter in detail only in a
classified setting.)
! Is the Navy correct in its judgment that these developments require
reorienting destroyer procurement over the next several years toward
a goal of improving the fleet’s BMD, area-defense AAW, and blue-
water ASW capabilities?
! Why, after arguing for years that the Navy needs the improved NSFS
capabilities of the DDG-51, does the Navy now believe that it has
more than enough capability in this area? What recent changes in
warfighting scenarios, concepts of operations, or programs have
occurred to support this conclusion?

CRS-15
A 2006 General Accountability Office (GAO) report on NSFS stated:
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.
The Navy’s Extended Range [Guided] Munition [or ERGM — a rocket-
assisted shell for the 5-inch guns on the Navy’s Aegis ships] and Zumwalt class
destroyer have cost more, taken longer to develop and field than anticipated, and
will deliver fewer capabilities than originally promised. Largely due to technical
challenges, the Extended Range Munition is expected to exceed the original cost
estimate for development by 550 percent, and the Navy has delayed delivery of
initial capability by 11 years. The munition’s path for development and fielding
remains uncertain as key technologies and munition design have not been
adequately demonstrated. The Office of the Secretary of Defense recently
assumed oversight of the program, and while a comprehensive review has not yet
been held, there are ongoing studies that could assist such a review. The Navy
has reduced Zumwalt class land attack munitions by 50 percent and cut ship
quantities from 32 to 7. The primary reason for reduced capabilities are cost
pressures created by the Navy’s original concept of revolutionary performance
at an unrealistically low cost. The Navy plans to begin construction of the first
two ships in the Zumwalt class in fiscal year 2008.
The recent study of future fire support needs approved by the Joint
Requirements Oversight Council identifies four capability gaps: command and
control of fire support; engaging moving targets in poor weather; engaging
targets when collateral damage is a concern; and engaging targets that require a
large volume of fire. The analysis that forms the basis of the joint study contends
that while the Extended Range Munition and Zumwalt class destroyer offer
significant capabilities in some scenarios, they do not provide enough capability
to meet all fire support needs. The Navy, through its surface warfare directorate,
has begun analyzing the three engagement gaps, but the Navy has not chosen an
organization to analyze the gap in command and control, which is essential for
target assignment and information. Any attempts to accept the risks or invest in
programs to fill remaining gaps should also involve the expeditionary warfare
directorate as the Marine Corps representative. The expeditionary warfare
directorate does not have a formal role in developing requirements, determining
capabilities, and managing resources for systems that provide naval surface fire
support.24
In late March 2008, the Navy announced that it would cease funding the
development program for the Extended Range Guided Munition (ERGM) — a new
rocket-assisted shell for the 5-inch guns on the Navy’s Aegis ships — due to
24 Government Accountability Office, Defense Acquisitions[:] Challenges Remain in
Developing Capabilities for Naval Surface Fire Support
, GAO-07-115, November 2006,
summary page.

CRS-16
dissatisfaction with the program’s progress.25 The ERGM was intended to extend the
firing range of the Aegis ships’ 5-inch guns to 50 nautical miles, or almost four times
their current range of 13 nautical miles. The Navy reportedly is considering possible
alternatives to ERGM for an extended-range 5-inch shell.26 Skeptics might argue
that, until a replacement for the ERGM program is identified and funded, the Navy’s
termination of the ERGM program would, other things held equal, increase the
apparent need for procuring a ship equipped with the AGS and the LRLAP.
Navy’s Selection of DDG-51 to Meet New Requirements
A fourth potential oversight issue for Congress concerns the Navy’s selection
of the Flight IIA DDG-51 as its preferred ship to procure over the next several years
for meeting the new capability requirements resulting from the changed threat
assessment. Potential questions for Congress include the following:
! What options did the Navy examine for modifying the DDG-1000
design so as to improve its capabilities for BMD, area-defense
AAW, and blue-water ASW? As discussed in Appendix C, such
options might include removing the DDG-1000’s two AGSs and
installing additional missile-launch tubes in their place; giving the
ship an ability to employ the SM-2 missile and provide area-defense
AAW; equipping the ship with a more powerful radar; and replacing
the ship’s sonar with one better optimized for blue-water ASW
operations. Are such modifications technically feasible, and how
would they change DDG-1000 program costs and risks?
! What options did the Navy examine for modifying the Flight IIA
DDG-51 design so as to reduce its O&S costs or improve its
capabilities for BMD and area-defense AAW? (For a discussion of
potential such options, see Appendix C.) Are such modifications
technically feasible, and how would they change DDG-1000
program costs and risks?
! How does the Navy’s preferred option of procuring Flight IIA DDG-
51s compare with the options of procuring modified DDG-1000s or
modified DDG-51s in terms of factors such as overall acquisition
cost; life-cycle O&S cost; capabilities provided; technical, cost, and
schedule risk; implications (if any) for the CG(X) program; and
25 See, for example, Dan Taylor, “Navy To Examine Its Options After Pulling Plug on
Munition Program,” Inside the Navy, March 31, 2008. See also William Matthews, “Guided
Munition May Be Canceled,” NavyTimes.com, March 21, 2008; Geoff Fein, “Navy Likely
To Terminate ERGM Program In Coming Days,” Defense Daily, March 24, 2008; William
Matthews, “End of ERGM Spotlights Other Future Guns,” NavyTimes.com, April 1, 2008.
26 See, for example, Dan Taylor, “Navy To Examine Its Options After Pulling Plug on
Munition Program,” Inside the Navy, March 31, 2008; Tom Kington, “U.S. navy Eyes
Italian Guided Munition,” Defense News, May 12, 2008: 10; “Starting Over,” Defense Daily,
June 9, 2008; Geoff Fein, “BAE-Lockheed Martin Partner To Develop ERM For Navy,”
Defense Daily, July 3, 2008.

CRS-17
industrial-base implications? Did the Navy accurately measure and
assess all these factors in deciding in favor of procuring Flight IIA
DDG-51s?
Regarding the question of comparative costs for procuring DDG-1000s or DDG-
51s, the Congressional Budget Office (CBO) believes that DDG-1000s will cost
substantially more to build than the Navy estimates. (The substantial difference of
opinion between the Navy and CBO on estimated DDG-1000 construction costs has
been a major DDG-1000 program oversight issue; for further discussion of the issue,
see the section entitled “Accuracy of Navy Cost Estimate” in Appendix D.) Using
a hypothetical annual procurement rate for DDG-51s that differs from the Navy’s
proposed profile as shown earlier in Table 1, CBO testified at the July 31 hearing
that:
Building the newest generation of destroyers and cruisers — the DDG-1000
Zumwalt class guided-missile destroyer and the CG(X) future cruiser (the
intended replacement for the Ticonderoga class guided-missile cruiser) — would
probably cost significantly more than the Navy estimates.
Building two DDG-51 Arleigh Burke class destroyers — the class of
destroyer currently in use — per year would cost less than building one
DDG-1000 per year. Procuring three DDG-51s per year would cost about 35
percent more than buying a single DDG-1000. Counting projected operating
costs over a period of 35 years, the total ownership cost of five DDG-1000s
would almost equal that of eight DDG-51s.27
Table 3 below reproduces a table from CBO’s July 31 testimony showing
CBO’s estimates of the comparative costs of procuring DDG-1000s and DDG-51s
at certain annual rates. The annual rates shown in the table for procuring DDG-51s
differ from the Navy’s proposed profile shown earlier in Table 2.
27 Statement of Eric J. Labs, Senior Analyst, [on] The Navy’s Surface Combatant Programs
before the Subcommittee on Seapower and Expeditionary Forces, Committee on Armed
Services, U.S. House of Representatives, July 31, 2008, p. 1.

CRS-18
Table 3. CBO Estimates of Costs for Procuring
DDG-1000s or DDG-51s
(FY2009-FY2013, in billions of constant FY2009 dollars)
09
10
11
12
13
Total
DDG-1000 (one per year)a
3.7 3.8
3.6
3.7
3.6
18.5

DDG-51 (annual procurement rate starting in FY2010)
One per year
0.4b
2.2
2.3
2.3
2.4
9.6
Two per year
0.4b
3.7
3.8
3.9
3.9
15.7
Three per year
0.4b
5.1
5.2
5.3
5.4
21.4
Memorandum:
DDG-1000 (Navy’s estimate)
2.5 2.5
2.2
2.3
2.0
11.4

Source: Table reproduced from Statement of Eric J. Labs, Senior Analyst, [on] The Navy’s
Surface Combatant Programs before the Subcommittee on Seapower and Expeditionary
Forces, Committee on Armed Services, U.S. House of Representatives, July 31, 2008, Table
2 on p. 7. The notes below are reproduced from the original table.
Notes: All figures include outfitting and post-delivery costs. The Navy has announced that
it will recommend ending the DDG-1000 program at two ships and resume building
DDG-51s in 2010.
a. Figures exclude amounts needed to pay for potential cost overruns on the first two
DDG-1000s.
b. Figure represents an assumption about the costs of restarting the production of DDG-51s.
Navy’s Description of DDG-1000 AAW Capabilities
A fourth potential oversight issue concerns Navy information on the question
of whether the DDG-1000 can employ the SM-2 (i.e., Standard Missile, version 2)
air-defense interceptor missile, and consequently perform area-defense AAW.28 The
Navy testified at the July 31 hearing that the DDG-1000 cannot successfully employ
the SM-2, and consequently cannot perform area-defense AAW. This came as a
surprise to observers who have believed for years that the DDG-1000 could employ
the SM-2 and perform area-defense AAW. This belief was based in part on the
following:
! Navy briefing slides on the DD(X)/DDG-1000 program from 2002
to 2008 have consistently listed the Standard Missile as among the
weapons to be carried by the DDG-1000.
28 An area-defense AAW system is capable of defending not only the ship on which it is
installed, but other ships in the area as well. An AAW system capable of defending only the
ship on which it is installed is referred to as a point-defense AAW system. Area-defense
AAW systems generally can intercept aircraft and antis-ship cruise missiles at longer ranges
than point-defense AAW systems. U.S. Navy ships need to be able to use the SM-2
interceptor to be considered capable of area-defense AAW operations. Navy ships that can
fire only shorter-ranged interceptors, such as the Enhanced Sea Sparrow Missile (ESSM)
or the Rolling Airframe Missile (RAM), are considered capable of point-defense AAW
operations only.

CRS-19
! The Navy’s designation of the ship in 2006 as DDG-1000 (meaning
a guided missile destroyer with hull number 1000) rather than DD-
1000 (meaning destroyer with hull number 1000) implied that the
ship would have an area-defense AAW capability. For U.S. Navy
surface combatants, the use of a “G” (meaning a guided missile ship)
in the ship’s designation traditionally has meant that the ship was
equipped with an area-defense AAW system.
The Navy’s FY2009 budget submission contains, in the service’s research and
development account, a project that appears aimed at making changes to SM-2 Block
IIIB missile (the currently used version of the SM-2) so as to integrate the SM-2
Block IIIB with the DDG-1000. The description of the project states in part that:
Production representative missiles will be built between FY10 & FY12 for the
21 missiles that the DDG 1000 require for Developmental Test & Operational
Test (DT&OT) in FY12 and FY13. SM2 IIIB will have dual use on AEGIS
Cruisers/Destroyers & DDG 1000.29
Potential oversight questions for Congress include the following:
! Was a capability to employ the SM-2 missile, and thus to provide
area-defense AAW, ever included in the DDG-1000 design?
! If so, when was this capability removed from the DDG-1000 design,
and why? If the capability was removed for cost reasons, what were
the savings associated with the decision?
! If a capability to employ the SM-2 missile, and thus to provide area-
defense AAW, was never included in the DDG-1000 design, why
did Navy briefing slides on the DD(X)/DDG-1000 program from
2002 to 2008 consistently list the Standard Missile as among the
weapons to be carried by the DDG-1000, and why was the ship
designated in 2006 as DDG-1000 rather than DD-1000? During the
years that the Navy supported continued DDG-1000 procurement
and defended the DDG-1000 against various criticisms, did the Navy
believe it was advantageous to have others believe, incorrectly, that
the ship could fire the SM-2 and provide area-defense AAW?
! If the Navy’s intention was to integrate an area-defense AAW
missile (either the SM-2 or the planned successor missile, the SM-6)
into the DDG-1000 at a later date, should the Navy have noted this
in its July 31 testimony?
29 Source: Description of Project 0439, Standard Missile Improvement, within Program
Element (PE) 0604366N, Standard Missile Improvements, in Department of the Navy Fiscal
Year (FY) 2009 Budget Estimates, Justification of Estimates, February 2008, Research,
Development, Test & Evaluation, Navy, Budget Activity 5
, R-1 Line Item No 101, Exhibit
R-2a, page 5 of 16 (pdf page 417 of 974). See also page 4 of 16 (pdf page 416 of 974).

CRS-20
! What is the status of Project 0439 within PE 0604366N of the
Navy’s research and development account, which appears aimed at
integrating the SM-2 Block IIIB missile into the DDG-1000? Has
the Navy altered the program since the submission of the FY2009
budget in February 2008?
! If the Navy at some point mis-described the DDG-1000’s AAW
capability with regard to employ the SM-2, what implications might
that have, if any, regarding the dependability of Navy descriptions
of other ship capabilities for the DDG-1000, the DDG-51, or other
ships?
Industrial Base Implications
An additional potential oversight issue for Congress concerns the industrial-base
implications of the Navy’s new position on destroyer procurement. Policymakers
have expressed concern about the potential impact on the shipbuilding industrial base
of a decision to stop DDG-1000 procurement and restart DDG-51 procurement.
Particular concern has been expressed about GD/BIW, because construction of
surface combatants is that yard’s primary source of work.
The Navy informed CRS on March 11, 2008, that a DDG-1000 would require,
by Navy estimates, about 2.5 times as much shipyard labor to build as would be
required to build a DDG-51.30 On April 10, 2008, the Navy clarified that this ratio
was based on the number of labor hours that the Navy estimates will be needed to
build the first two DDG-1000s, and that subsequent DDG-1000s would require
smaller amounts of shipyard labor, reducing the ratio for subsequent ships to
something less than 2.5 to 1.31 (The DDG-51 design, in contrast, is already well
down its learning curve and would not decline by a substantial additional amount
through additional production.) Assuming a rate of learning in the DDG-1000
production process that might be typical for a complex combatant ship, and taking
into account the shared production arrangement for the DDG-1000 (see Appendix
A
for a description of this arrangement), a seventh DDG-1000, for example, might
require roughly 1.7 to 1.9 times as much shipyard labor to build as a baseline Flight
IIA DDG-51. Other calculations based on these factors include the following:
! Procuring roughly 9.3 to 10.3 Flight IIA DDG-51s through FY2013
would provide roughly as many shipyard labor hours as procuring
ships 3 through 7 in the 7-ship DDG-1000 program of record.
! Assigning 5.1 to 5.7 of those 9.3 to 10.3 Flight IIA DDG-51s to a
shipyard would provide that shipyard with roughly as many shipyard
labor hours as it would receive it were the primary yard for building
ships 3, 5, and 7 in the 7-ship DDG-1000 program of record.
30 Source: Navy Office of Legislative Affairs telephone call to CRS on March 11, 2008.
31 Source: Navy briefing to CRS and CBO on April 10, 2008.

CRS-21
! Assigning 4.2 to 4.6 of those 9.3 to 10.3 Flight IIA DDG-51s to a
shipyard would provide that shipyard with roughly as many shipyard
labor hours as it would receive it were the primary yard for building
ships 4 and 6 in the 7-ship DDG-1000 program of record.
As shown earlier in Table 1, if a DDG-51 is procured in FY2009, then the
Navy’s new proposal for destroyer procurement would procure a total of 7 DDG-51s
through FY2013 (plus two more DDG-51s in FY2014 and FY2015). The total of 7
DDG-51s through FY2013 is less than the calculation of 9.3 to 10.3 DDG-51s
through FY2013 shown above. This suggests that if DDG-51s are procured as the
Navy is now proposing, and if policymakers wish to fully replace the shipyard labor
hours that would have been provided by procuring ships 3 through 7 in the 7-ship
DDG-1000 program of record, then policymakers might wish to consider the option
of funding, between now and FY2013, supplementary forms of work for the
shipyards that would provide the equivalent of roughly 2 or 3 DDG-51s’ worth of
additional shipyard labor hours. There are multiple options for supplementing DDG-
51 construction work so as to meet such a goal. These options include but are not
limited to the following:
! assigning DDG-51 modernizations to the two yards that built the
ships — GD/BIW and the Ingalls yard at Pascagoula, MS, that forms
part of Northrop Grumman Shipbuilding (NGSB);
! assigning Aegis cruiser (i.e., CG-47 class) modernizations to the two
yards that built the ships (again, GD/BIW and the Ingalls yard);32
! having GD/BIW participate in the construction of Littoral Combat
Ships (LCSs) that are built to the General Dynamics LCS design;33
! procuring one or more LPD-17s beyond those in the Navy’s
shipbuilding plan, and perhaps have GD/BIW build parts of those
ships (similar to how GD/BIW is currently building parts of LPD-24
for NGSB);34
! procuring additional LHA-type amphibious assault ships, and
perhaps have GD/BIW build parts of those ships;35
32 For more on the Navy’s program for modernizing its existing Aegis ships (both CG-47s
and DDG-51s), see CRS Report RL22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.
33 For more on the LCS program, see CRS Report RL33741, Navy Littoral Combat Ship
(LCS) Program: Background, Oversight Issues, and Options for Congress
, by Ronald
O’Rourke.
34 GD/BIW was originally slated to build 4 of a then-planned class of 12 LPD-17s, and is
currently building parts of LPD-24, the eighth ship in the class. NGSB previously
subcontracted parts of other LPD-17s to a shipyard in Texas.
35 For additional discussion of the amphibious lift goal and the numbers of amphibious ships
that might be procured to support that goal, see CRS Report RL34476, Navy LPD-17
(continued...)

CRS-22
! having GD/BIW and/or Ingalls participate in the construction of
Joint High Speed Vessels (JHSVs) being acquired for the Navy and
Army, and perhaps also accelerating the procurement of these ships;
! procuring adjunct non-combat radar ships (an option discussed in
Appendix C) and assigning the construction of those ships to
GD/BIW and/or NGSB;
! procuring AGS-armed versions of the basic LPD-17 class hull —
another option that has been suggested for improving the fleet’s
NSFS capabilities (see Appendix C) — and perhaps have GD/BIW
builds parts of those ships;
! procuring a third and final DDG-1000;36
! procuring two new polar icebreakers for the Coast Guard, and
assigning construction of those ships to NGSB and/or GD/BIW;37
! accelerating the procurement of National Security Cutters (NSCs)
for the Coast Guard (NSCs are built at NGSB); and
! having GD/BIW and/or Ingalls participate in the construction of Fast
Response Cutters (FRCs) for the Coast Guard, and perhaps
accelerating the procurement of these ships.38
Some of these options would be available for implementation sooner than
others. Those available the soonest might be of the most use for bridging a work gap
between the winding down of DDG-1000 production and the restart of DDG-51
production. The Navy and other observers have cautioned that the time line for
restarting procurement of the current Flight IIA design could be extended by the need
to restart or reestablish vendors for certain key DDG-51 components.
35 (...continued)
Amphibious Ship Procurement: Background, Issues, and Options for Congress, by Ronald
O’Rourke.
36 Procurement of a third and final DDG-1000 could be viewed as somewhat analogous to
the procurement of the third and final Seawolf (SSN-21) class submarine, which was
procured in part to help maintain the submarine construction industrial base while the
successor Virginia (SSN-774) class design was being readied for procurement.
37 For a discussion of the option of procuring new polar icebreakers for the Coast Guard, see
CRS Report RL34391, Coast Guard Polar Icebreaker Modernization: Background, Issues,
and Options for Congress
, by Ronald O’Rourke. The procurement of the Coast Guard’s
newest polar icebreaker, Healy (WAGB-20), was funded in FY1990 through the Navy’s
shipbuilding budget (the Shipbuilding and Conversion, Navy [SCN] appropriation account).
38 For more on the NSC and FRC programs, see CRS Report RL33753, Coast Guard
Deepwater Acquisition Programs: Background, Oversight Issues, and Options for Congress
,
by Ronald O’Rourke.

CRS-23
In addition to total shipyard hours, another factor to consider for maintaining the
shipyards is whether the mix of work being pursued preserves critical ship-
construction skills, including outfitting skills and combat system integration skills.
The options listed below for supplementing DDG-51 construction work would
support such skills to varying degrees.
Increasing the scope of work to be performed in the DDG-51 or CG-47
modernization programs to include configuration changes like those discussed in
Appendix C could increase the amount of work that would be provided by the first
two options above.
Procuring additional ships to be built at NGSB could help support GD/BIW,
even if GD/BIW does not share in their production, by permitting a greater share of
DDG-51 construction work to be assigned to GD/BIW while still adequately
supporting NGSB.
Options For Congress
Congress, in its consideration of the FY2009 defense authorization and
appropriations bills, has at least three general options regarding the Navy’s new
position on destroyer procurement:
! Support the Navy’s new position. This option could involve,
among other things, providing partial or full funding for the
procurement of a DDG-51 in FY2009.
! Reject the Navy’s new position. This option could involve, among
other things, providing partial or full funding for the procurement of
a DDG-1000 in FY2009.
! Adopt an intermediate position. This option could involve, among
other things, providing partial or full funding for the procurement of
either a DDG-51 or DDG-1000 destroyer in FY2009, with the choice
to be made by the Navy. Alternatively, it could involve providing
funding for the design and/or procurement of modified DDG-51s,
modified DDG-1000s, adjunct radar ships, or other ships — options
described in Appendix C.
Supplementary options, which could be combined with any of the three general
options above, include the following:
! Request or require the Navy to provide additional information, in the
form of briefings or reports, on its new position regarding destroyer
procurement, including information on its changed threat assessment
and on its assessment of ship-procurement options for responding to
that changed assessment.

CRS-24
! Request GAO or some other independent entity to review and assess
the Navy’s analysis of the changed threat environment and ship-
procurement options for responding to that changed assessment.
! Request CBO to provide an updated estimate of comparative DDG-
1000 and DDG-51 procurement costs, using the Navy’s proposed
DDG-51 procurement file as shown in Table 2.
! Prohibit the Navy from expending some portion of FY2009 funds
until it takes certain actions, such as providing certain information
that Congress has requested regarding the Navy’s new position on
destroyer procurement.
! Implement one or more of the options outlined earlier for
supplementing destroyer-construction work at GD/BIW and/or
Ingalls with other forms of work.
Legislative Activity
Table 4 summarizes congressional action on the Navy’s FY2009 request for
research and development, procurement, and advance procurement funding for the
DDG-1000 program.
Table 4. Congressional Action on FY2009 Funding Request
(figures in millions of then-year dollars, rounded to nearest million)
Authorization
Appropriation
Request
HASC
SASC
Conf.
HACd
SAC
Conf.
Research and
449
449
449
n/a
developmenta
Procurementb
Procurement
2503
0
2503
0
Advance
51
400c
51
450
procurement
Total
2554
400c
2554
450
procurement
Source: FY2009 Navy budget submission and committee reports on the FY2009 defense
authorization and appropriation bills.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services
Committee, HAC is House Appropriations Committee; SAC is Senate Appropriations
Committee; Conf. is conference report.
a. Research, Development, Test, and Evaluation, Navy (RDT&EN) account.
b. Shipbuilding and Conversion, Navy (SCN) account.
c. To be used “for the construction of DDG 51 class destroyers or DDG 1000 class
destroyers.”
d. Figures shown are those recommended by the Defense subcommittee of the HAC, as
presented in July 30, 2008, press release issued by Representative John Mutha, the
subcommittee chairman.

CRS-25
FY2009 Defense Authorization Bill (H.R. 5658/S. 3001)
House. The House Armed Services Committee, in its report (H.Rept. 110-652
of May 16, 2008) on H.R. 5658, recommended reducing the Navy’s request for
FY2009 DDG-1000 procurement funding from $2,503 million to zero, and increasing
the Navy’s FY2009 request for DDG-1000 advance procurement funding from $51
million to $400 million. (Page 79, lines 010 and 011.) The $400 million in advance
procurement funding would be used “for the construction of DDG 51 class destroyers
or DDG 1000 class destroyers.” (Page 83) The report recommended approval of the
DDG-1000 portion of the Navy’s request for FY2009 research and funding request
for the DDG-1000 and CG(X) programs. (Page 186, line 97.) With regard to
procurement and advance procurement funding, the report states that:
The committee authorizes a reallocation of funding in the Shipbuilding and
Conversion, Navy account and the National Defense Sealift Fund. The committee
recommends: full funding for the 10th ship of the LPD 17 class; an increase in
advance procurement funding for the Virginia class submarine program,
necessary for the procurement of 2 ships in fiscal year 2010; advance
procurement for the final 2 ships of the T-AKE class; and advance procurement
for the construction of DDG 51 class destroyers or DDG 1000 class destroyers.
The committee notes that due to the overall delay in the DDG 1000 destroyer
program, the Navy would be unable to execute the full funding request in fiscal
year 2009 for the third ship of the planned seven ship class. Additionally, the
committee is concerned with potential significant cost overruns in the DDG 1000
program and considers it prudent to pause the program until technological
challenges are completely understood.
The committee authorizes these programs without prejudice to any specific
program. The committee also understands the Navy is strongly considering
re-starting the DDG 51 class destroyer upgraded with an improved radar system
to fill an urgent need in ballistic missile defense. The committee would only
support that decision if the industrial base for surface combatant construction is
not affected. The committee expects the Secretary of Defense, subject to the
availability of appropriations, to enter into advance procurement and advance
construction contracts for the construction of surface combatants balanced
between the two current surface combatant shipyards, taking into account
workforce challenges still in effect on the Gulf Coast due to the lingering
economic effects of Hurricane Katrina. (Page 83)
See also the additional views of Representative Niki Tsongas on pages 654-655
of the report.
Senate. The Senate Armed Services Committee, in its report (S.Rept. 110-335
of May 12, 2008) on S. 3001, recommended approval of the Navy’s requests for
FY2009 procurement and advance procurement funding for the DDG-1000 program.
(Page 58, lines 010 and 011.) The report recommended approval of the DDG-1000
portion of the Navy’s request for FY2009 research and funding request for the DDG-
1000 and CG(X) programs. (Page 181, line 97.)

CRS-26
FY2009 Defense Appropriations Bill
House. On July 30, 2008, Representative John Murtha, the chairman of the
Defense subcommittee of the House Appropriations Committee, issued a press
release summarizing the subcommittee’s markup that day of the FY2009 defense
appropriations bill. The press release stated that the subcommittee recommended a
total of $450 million in advance procurement funding, and no procurement funding,
for the DDG-1000 program.39
39 Source: July 30, 2008, press release from the office of the Honorable John P. Murtha,
entitled “Murtha Summary of the FY09 Defense Appropriations Bill,” p. 2.

CRS-27
Appendix A. Additional Background Information on
DDG-1000 Program
This appendix presents additional background information on the DDG-1000
program. It presents information on the DDG-1000 program as it existed just prior
to the Navy’s late July 2008 change in position on future destroyer procurement.

Origin of Program
The program known today as the DDG-1000 program was announced on
November 1, 2001, when the Navy stated that it was replacing a destroyer-
development effort called the DD-21 program, which the Navy had initiated in the
mid-1990s, with a new Future Surface Combatant Program aimed at developing and
acquiring a family of three new classes of surface combatants:40
! a destroyer called DD(X) for the precision long-range strike and
naval gunfire mission,
! a cruiser called CG(X) for the air defense and ballistic missile
mission,41 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.42
On April 7, 2006, the Navy announced that it had redesignated the DD(X)
program as the DDG-1000 program. The Navy also confirmed in that 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.43
40 The DD-21 program was part of a Navy surface combatant acquisition effort begun in the
mid-1990s and called the SC-21 (Surface Combatant for the 21st Century) program. The SC-
21 program envisaged a new destroyer called DD-21 and a new cruiser called CG-21. When
the Navy announced the Future Surface Combatant Program in 2001, development work on
the DD-21 had been underway for several years, while the start of development work on the
CG-21 was still years in the future. The current DDG-1000 destroyer CG(X) cruiser
programs can be viewed as the descendants, respectively, of the DD-21 and CG-21. The
acronym SC-21 is still used in the Navy’s research and development account to designate
the line item (i.e., program element) that funds development work on both the DDG-1000
and CG(X).
41 For more on the CG(X) program, see CRS Report RL34179, Navy CG(X) Cruiser
Program: Background, Oversight Issues, and Options for Congress
, by Ronald O’Rourke.
42 For more on the LCS program, see CRS Report RL33741, Navy Littoral Combat Ship
(LCS) Program: Oversight Issues and Options for Congress
, by Ronald O’Rourke.
43 For more on Navy ship names, see CRS Report RS22478, Navy Ship Names: Background
(continued...)

CRS-28
Acquisition Strategy
Navy Management. Since September 30, 2005, the Navy has managed the
DDG-1000 program through a series of separate contracts with major DDG-1000
contractors, including Northrop Grumman Shipbuilding (NGSB), General Dynamics
Bath Iron Works (GD/BIW), Raytheon, and BAE Systems (the maker of the AGS).
Under this arrangement, the Navy is acting as the overall system integrator for the
program.
Earlier Proposal for Winner-Take-All Acquisition Strategy. Under a
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 was to have been built by NGSB, the second ship was to have been built
by GD/BIW, and contracts for building the first six were to have been equally divided
between NGSB 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 NGSB
and GD/BIW to build all DDG-1000s. On April 20, 2005, the USD AT&L issued
a decision memorandum deferring this proposal, stating in part, “at this time, I
consider it premature to change the shipbuilder portion of the acquisition strategy
which I approved on February 24, 2004.”
Several Members of Congress also 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.
On May 25, 2005, the Navy announced that, in light of Section 1019 of P.L.
109-13, it wanted to shift to a “dual-lead-ship” acquisition strategy, under which two
DDG-1000s would be procured in FY2007, with one to be designed and built by
NGSB and the other by GD/BIW.
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 again 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.
Milestone B Approval for Dual-Lead-Ship Strategy. On November 23,
2005, the USD AT&L, granted Milestone B approval for the DDG-1000, permitting
the program to enter the System Development and Demonstration (SDD) phase. As
part of this decision, the USD AT&L approved the Navy’s proposed dual-lead-ship
43 (...continued)
For Congress, by Ronald O’Rourke.

CRS-29
acquisition strategy and a low rate initial production quantity of eight ships (one more
than the Navy subsequently planned to procure).
Construction Sequence for Two Lead Ships. Until July 2007, it was
expected that NGSB would be the final-assembly yard for the first DDG-1000 and
that GD/BIW would be the final-assembly yard for the second. On July 17 and 18,
2007, it was reported that the Navy was considering the option of instead assigning
the first ship to GD/BIW and the second to NGSB. The potential switch in
construction sequence reportedly was being considered by the Navy in part because
the Navy believed it could provide some additional help in maintaining GD/BIW’s
work force as its DDG-51-related construction work winds down, and because it
could also provide some additional time for NGSB to recover from Katrina-related
damage.44 On September 25, 2007, the Navy announced that it had decided to build
the first DDG-1000 at GD/BIW, and the second at NGSB.45 The difference in the
two ships’ construction schedules (about one year) is driven in large part by the
production capacities of vendors making certain components for the ships — some
of these vendors can make only one ship-set worth of components at a time.
Contract Modification Awards for Two Lead Ships. On February 14,
2008, the Navy awarded contract modifications to GD/BIW and NGSB for the
construction of the two lead ships. The awards were modifications to existing
contracts that the Navy has with GD/BIW and NGSB for detailed design and
construction of the two lead ships. Under the modified contracts, the line item for
the construction of the dual lead ships is treated as a cost plus incentive fee (CPIF)
item.
Acquisition Strategy for Third and Subsequent Ships.46 Under an
acquisition strategy approved by the Department of Defense (DOD) acquisition
executive and documented in an updated Acquisition Strategy Report (ASR) of
February 13, 2008, the Navy intended to conduct a single competition between
GD/BIW and NGSB for the contracts to build the five remaining ships in the
previously planned seven-ship program (i.e., ships three through seven). The winner
of the competition was to have built three ships (the third, fifth, and seventh ships in
the program, which were to have been procured in FY2009, FY2011, and FY2013,
respectively), while the other firm was to have built two ships (the fourth and sixth
ships in the program, which were to have been procured in FY2010 and FY2012,
respectively).
44 Christopher P. Cavas, “First DDG 1000 Could Shift To Bath,” Defense News, July 17,
2007; Geoff Fein, “Navy Exploring Workload Options For DDG-1000,” Defense Daily, July
18, 2007.
45 Geoff Fein, “Bath Iron Works To Take Delivery of First Set of DDG-1000 Equipment,”
Defense Daily, September 26, 2007; Christopher P. Cavas, “Bath To Build First DDG
1000,” DefenseNews.com, October 1, 2007; and Chris Johnson, “Navy Changes Equipment
Delivery For First Two DDG-1000 Destroyers,” Inside the Navy, October 1, 2007.
46 The information presented in this section is based on an April 10, 2008, Navy briefing to
CRS and CBO on the DDG-1000 program.

CRS-30
Under this strategy, each firm would have built a minimum of two ships, and the
two firms would in effect have competed for the right to build the remaining fifth
ship. In light of the shared production arrangement for the DDG-1000 program (see
discussion below), the two firms more specifically would have been competing for
the right to build certain portions of that fifth ship, and to perform the final-assembly
work on that ship — work that would amount to about 50% of the total shipyard
labor hours needed to build that fifth ship. The two firms could also be viewed as
having been competing for the timing of their respective second ships, as the
winner’s second ship would have been the ship to be procured in FY2009, while the
other firm’s second ship would have been the ship to be procured in FY2010.
The Navy intended to structure the contract with the winning firm as a fixed-
price incentive fee (FPIF) contract to build the ship that was to have been procured
in FY2009, with priced options for building the ships that were to have been
procured in FY2011 and FY2013. The Navy intended to structure the contract with
the other firm as an FPIF contract to build the ship that was to have been procured
in FY2010, with a priced option to build the ship was to have been procured in
FY2012. If one or more of the third and subsequent ships were not procured in the
years in which the Navy currently planned procure them, the options would not have
been exercised and the Navy might have conducted a new competition to determine
who would have built the follow-on ships in the program.
Shared Production Arrangement. NGSB and GD/BIW have agreed on a
shared-production arrangement for building DDG-1000s. Under this arrangement,
certain parts of each ship will be built by NGSB, certain other parts of each ship will
be built by GD/BIW, and the remaining parts of each ship would be built by the yard
that does final-assembly work on that ship. Each firm’s repeating portion of the ship
would amount to about 25% of the labor hours for the ship; the yard that does the
final-assembly work on the ship would also perform the remaining 50% or so of the
labor hours needed to build the ship. The arrangement can be viewed as somewhat
analogous to the joint-production arrangement for Virginia-class submarines that was
proposed by industry and the Navy, and then approved by Congress in Section 121
of the FY1998 defense authorization act (H.R. 1119/P.L. 105-85 of November 18,
1997).47
Procurement Cost Cap
Section 123 of the FY2006 defense authorization act (H.R. 1815/P.L. 109-163
of January 6, 2006), limited the procurement cost of the fifth DDG-1000 to $2.3
billion, plus adjustments for inflation and other factors.
47 For more on the Virginia-class joint-production arrangement, see CRS Report RL32418,
Navy Attack Submarine Force-Level Goal and Procurement Rate: Background and Issues
for Congress
, by Ronald O’Rourke.

CRS-31
Appendix B. Navy Testimony for
July 31, 2008, Hearing
This appendix reprints in its entirety the text of the Navy’s prepared statement
for the July 31, 2008, hearing on destroyer procurement before the Seapower and
Expeditionary Forces subcommittee of the House Armed Services Committee.48 The
text states:
Chairman Taylor, Ranking Member Bartlett, and distinguished Members
of the Seapower and Expeditionary Forces Subcommittee, the Department is
committed to executing the Cooperative Maritime Strategy, modernizing our
fleet, and building the fleet of tomorrow. The Navy urges your support to fully
fund the Department’s 2009 shipbuilding request. The Navy requests the
Committee’s support for the Navy’s recent plan to truncate the DDG 1000
program at two ships and reopen the DDG 51 line to better align our surface
combatant investment strategy with our nation’s warfighting needs. The Navy
continues to address the dynamic capability requirements of the Fleet while
balancing the demands placed on limited resources and producing a plan that
provides maximum stability for the industrial base. Modernizing the Fleet’s
cruisers and destroyers and executing an affordable shipbuilding plan are crucial
to constructing and maintaining a 313 ship Navy with the capacity and capability
to meet our country’s global maritime needs. In an age of rapidly evolving
threats and fiscal constraints, we must ensure we are building only to our highest
priority requirements and that the mission sets we envision for the future
represent the most likely of those potential futures.
Surface combatants are the workhorses of our Fleet and central to our
traditional Navy core capabilities. Our cruisers, destroyers, and the new littoral
combat ships bring capabilities to the fleet, that enable us to deter our enemies,
project power, deploy forward and control the seas.
Strategic Environment
Rapidly evolving traditional and asymmetric threats continue to pose
increasing challenges to Combatant Commanders. State actors and non-state
actors who, in the past, have only posed limited threats in the littoral are
expanding their reach beyond their own shores with improved capabilities in blue
water submarine operations, advanced anti-ship cruise missiles and ballistic
missiles. A number of countries who historically have only possessed regional
military capabilities are investing in their Navy to extend their reach and
influence as they compete in global markets. Our Navy will need to outpace
other Navies in the blue water ocean environment as they extend their reach.
This will require us to continue to improve our blue water anti-submarine and
anti-ballistic missile capabilities in order to counter improving anti-access
strategies.
48 Statement of Vice Admiral Barry McCullough, Deputy Chief of Naval Operations for
Integration of Capabilities and Resources, and Ms. Allison Stiller, Deputy Assistant
Secretary of the Navy (Ship Programs), before the Subcommittee on Seapower and
Expeditionary Forces of the House Armed Services Committee, on Surface Combatant
Requirements and Acquisition Strategies, July 31, 2008, 11 pp.

CRS-32
The Navy remains committed to having the capability and capacity to win
our Nation’s wars and prevent future wars. The rise of violent extremism has
become a greater threat as it rapidly evolves with diverse and adaptive
capabilities. These often stateless organizations pose further challenges with
their aspirations of weapons of mass destruction development and desire to
proliferate missiles and other highly, technologically advanced weapons. All of
these threats require the Navy to have the capacity to build partnerships and
continue our efforts of investing in maritime domain awareness; intelligence,
surveillance, and reconnaissance programs; and having both kinetic and
non-kinetic effects capabilities. We call on our surface combatants to conduct
these operations and execute the Maritime Strategy today, and we will continue
to call on them to provide maritime supremacy from the ungoverned spaces of
the littorals to vast expanses of our world’s oceans.
Challenges
The challenge for the Navy is to maintain traditional core naval capabilities
while simultaneously enhancing our ability to conduct expanded core roles and
missions to ensure naval power and influence can be applied on the sea, across
the littorals, and ashore. It is no longer feasible or affordable to purchase the
most capable, multi-mission platform and then limit its use to execute tailored
mission areas or focus on specific threats. As asymmetric threats continue to
evolve, so will traditional threats. The Navy must find affordable and adaptable
ways to fill current and future warfighting gaps.
Beyond addressing capability requirements, the Navy needs to have the
right capacity to remain a global deterrent and meet Combatant Commander
warfighting requirements. Combatant Commanders continue to request more
surface ships and increased naval presence to expand our cooperation with new
partners in Africa, the Black Sea, the Baltic Region, and the Indian Ocean and
maintain our relationships with our allies and friends. Therefore, we must
increase surface combatant capacity in order to meet Combatant Commander
demands today for ballistic missile defense, theater security cooperation, steady
state security posture and to meet future demands as we standup Africa
Command (AFRICOM) and the FOURTH Fleet in SOUTHERN Command. The
Navy also continues to remain committed to our Ballistic Missile Defense
partners around the globe, including Japan, Korea, the Netherlands, and Spain.
Future Force
The 30 year ship building plan was designed to field the force structure to
meet the requirements of the national security strategy and the Quadrennial
Defense Review meeting the FY 2020 threat. The 313-ship force floor represents
the maximum acceptable risk in meeting the security demands of the 21st
century. In the balance of capability and capacity, the Navy has found that there
are increased warfighting gaps, particularly in the area of integrated air and
missile defense capability. Capacity also matters, and capacity is capability for
the Irregular War we are in today.
The DDG 1000 program is developing a capable ship which meets the
requirements for which it was designed. The DDG 1000, with its Dual Band
Radar and sonar suite design are optimized for the littoral environment.
However, in the current program of record, the DDG 1000 cannot perform area
air defense; specifically, it cannot successfully employ the Standard Missile-2

CRS-33
(SM-2), SM-3 or SM-6 and is incapable of conducting Ballistic Missile Defense.
Although superior in littoral ASW, the DDG 1000 lower power sonar design is
less effective in the blue water than DDG-51 capability. DDG 1000’s Advanced
Gun System (AGS) design provides enhanced Naval Fires Support capability in
the littorals with increased survivability. However, with the accelerated
advancement of precision munitions and targeting, excess fires capacity already
exists from tactical aviation and organic USMC fires. Unfortunately, the DDG
1000 design sacrifices capacity for increased capability in an area where Navy
already has, and is projected to have sufficient capacity and capability.
The DDG 51 is a proven, multi-mission guided missile destroyer. She is
the Navy’s most capable ship against ballistic missile threats and adds capacity
to provide regional ballistic missile defense. DDG 51 spirals will better bridge
the ballistic missile defense gap to the next generation Cruiser. Production costs
of DDG 51s are known. The risks associated with re-opening the DDG 51 line
are less than the risks of continuing the DDG 1000 class beyond 2 ships when
balanced with the capability and capacity of pursuing the 313 ship fleet.
Current Execution
The Department is committed to executing the acquisition plan for our
future force. Acquisition Professionals and Requirements Officers are working
closely to maintain the Department’s commitment to an affordable shipbuilding
and modernization plan.
DDG 51 Destroyer Program and Production Restart Assessment
The capability of DDG 51 Class ships being built today is markedly more
advanced than the initial ships of the class. The DDG 51 Class was developed
in three incremental flights, with upgraded technology and capability built into
each subsequent hull. Ships are currently being constructed at both General
Dynamics (GD) Bath Iron Works (BIW) and Northrop Grumman Shipbuilding
(NGSB). 62 ships have previously been authorized and appropriated, with the
most recent procurement of three ships in FY 2005. A total of 53 ships have
been delivered to the Navy. Five ships remain under construction at GD BIW,
and 4 at NGSB. The last ship currently under construction, DDG 112, is
scheduled for delivery in FY 2011. All material for DDG 51 Class ships
currently under construction has been procured, with the majority of the long
lead material purchased in an Economic Order Quantity buy in FY 2002.
DDG 51 class production has been extremely stable, with successful serial
production at both shipbuilders. Despite some setbacks, such as the impacts of
Hurricane Katrina at NGSB, the costs associated with DDG 51 class shipbuilding
are well understood. The Aegis Weapon System has been incrementally
developed successfully to add increased capabilities and transition to the use of
open architecture and increased use of commercial systems.
Additionally, the DDG 51 modernization program is currently modernizing
the Hull, Mechanical, and Electrical (HM&E) and Combat Systems. These
combined upgrades support a reduction in manpower and operating costs,
achieve expected service life, and allow the class to pace the projected threat
well into the 21st century.

CRS-34
Based upon a Navy assessment, including discussions with both current
shipbuilders, to explore any subcontractor issues, a restart of DDG 51
procurement in FY 2009 is feasible. However, several ship and Government
Furnished Equipment vendor base issues (including configuration change issues
and production line re-starts) must be addressed in order to award and construct
additional ships, which will increase ship costs above the most recently procured
ships. The most notable being the restart of the DDG 51 reduction gear
production. The Navy is confident that these issues can be resolved to support
a FY 2009 restart. DDG 51 class restart beyond FY 2009 presents significant
risks and therefore additional costs.
However, both shipbuilders have indicated to the Navy that these lead time
challenges can be mitigated with advance procurement and an adjusted build
sequence, and that DDG 51 restart in FY 2009 is executable in both shipyards.
Regarding the combat systems, the last production contracts were awarded in
2006. The cost and ease of restarting those production lines is a function of time,
and part availability on military specification items which would need to be
addressed.
Given the truncation of the DDG 1000 program at two ships, the Navy
estimate for procurement of a single DDG 51 class ship in FY 2009 is $2.2
billion. This estimate utilizes the latest audited Forward Pricing Rate
Agreements (FPRAs) rates. Impacts for production line restart and contractor
furnished equipment/government furnished equipment obsolescence are
included. The Navy has not finalized the acquisition strategy for a FY 2009
DDG 51 and follow-on procurements. The Navy will carefully consider stability
of the industrial base during the planning of the specific strategy.
DDG 1000 Class Destroyer Program
The Navy remains ready to begin construction of DDG 1000. A rigorous
systems engineering approach for the program has been employed to mitigate the
risk involved with building a complex lead ship surface combatant. This
approach included successful building and testing of the 10 critical technologies
via Engineering Development Models. Naval Vessel Rules were also fully
incorporated prior to commencing detail design. Design of the Mission Systems
is now nearly 100 percent complete. Detail design will be approximately 85
percent complete prior to the start of fabrication, and will be more complete than
any other previous surface warship.
The systems engineering approach for DDG 1000 has been well conceived
and well executed. However, overall, the remaining program risk involved in
integrating the Mission Systems, 10 EDM’s, and the ship detail design is still
moderate. Particularly, the Dual Band Radar and Integrated Power System have
further land-based testing to complete, and the software development for the
Total Ship Computing Environment continues. Careful planning has been
conducted so that where further development does continue on systems, these
have been partially tested to the point that any potential changes are not likely to
affect software or system interfaces, with a low risk of affecting either detail
design or software development.
As such, the maturity of the ship design, critical technologies, and mission
systems support commencement of production. However, it is accurate that the
integration of a complex, lead ship, surface combatant with significant new

CRS-35
technologies always entails risk. And though the Navy cost estimate for DDG
1000 is based on a detailed, bottoms-up approach, this complex integration does
increase the cost risk.

Truncation of the program at two ships will result in cost impacts due to
program shutdown, continuation of required class service tasks, and potential
increased costs for DDG 1000 and 1001 and other programs. Additionally, the
RDT&E efforts for the DDG 1000 program, which include software development
and other critical efforts, must continue in order to deliver completed ships and
in the CVN 78 Class.
Conclusion
Your Navy remains committed to building the fleet of the future and
modernizing our current fleet. The Navy’s top shipbuilding priority remains
achieving a surface combatant shipbuilding program that is equally capable of
assuring peace today and access to the global economy tomorrow regardless of
the threats posed in an uncertain future. To accomplish this, we are steadfast in
our intention to not use procurement accounts for other Navy program offsets.
Procurement and R&D investments made today will serve our country and fleet
well beyond 2020 as we modernize the fleet we have and build the fleet we need.
Continuing to build DDG 51s enables us to expand warfighting capacity and
capability in areas needed by Combatant Commanders and allows us to reach the
313 ship level sooner. Meeting evolving blue water and near-land threats that the
DDG 51 can match provides less risk to the joint warfighter. There is less risk
associated with the affordability of maintaining DDG 51 line versus continuing
the DDG 1000 line. The Navy is ready to restart DDG 51 production, and is
committed to successfully delivering DDG 1000 and 1001 from which, we will
inform new ship class designs. The Navy has not finalized the acquisition
strategy for FY 2009 DDG 51 and follow-on procurements, however acquisition
planning is fully underway to execute this change in the Navy’s shipbuilding
requirements. The Department urges the Committee’s support for full funding
of the surface combatant procurement account for FY 2009 and approving our
proposal regarding DDG’s. Thank you for your continued support and
commitment to our Navy. I look forward to continuing to work closely with you
to make our maritime services and nation more secure and prosperous.

CRS-36
Appendix C. Ship Design Options
This appendix presents some ship design options that policymakers may
consider for reducing DDG-51 O&S costs, or for improving fleet capabilities through
procurement of modified DDG-51s, modified DDG-1000s, or other ships. Parts of
this appendix are adapted from July 31, 2008, CRS testimony to the Seapower and
Expeditionary Forces subcommittee of the House Armed Services Committee,49
which in turn was based on information in the Navy program of record, past briefings
and other information provided by the Navy and industry to CRS on the DDG-51 and
DDG-1000 programs, industry briefings to CRS on DDG-51 and DDG-1000 design
options that were done at CRS’ request, and open-source information.
DDG-51 Design Options
Although the Navy’s proposal for restarting DDG-51 procurement calls for
procuring essentially repeat copies of the current Flight IIA DDG-51 design,
policymakers may consider the alternative of procuring a modified version of the
DDG-51 design. A modified version could have lower O&S costs, and could be
better aligned with a potential policy goal of using DDG-51 procurement to improve
the fleet’s capabilities for NSFS or for BMD and area-defense AAW (the latter two
referred to in this appendix as Integrated Air and Missile Defense, or IAMD).
In deciding whether destroyer procurement over the next several years should
focus on providing improved NSFS capabilities or improved IAMD capabilities,
policymakers could consider several factors, including current and potential U.S.
Navy operations, the operational requirements for conducting these operations,
current and projected threats or challenges associated with these operations, and
current or projected Navy or DOD programs (other than destroyer procurement) for
countering these threats or overcoming these challenges.
A key system for providing improved NSFS capability is the 155mm Advanced
Gun System (AGS) and the associated 155mm Long Range Land Attack Projectile
(LRLAP). Key systems for providing improved IAMD capabilities include higher-
capability radars and vertical-launch tubes for IAMD interceptors.
The Navy has procured different versions of the DDG-51 design over time. A
significant change in the design occurred in FY1994, when the Navy shifted DDG-51
procurement to the Flight IIA version of the ship, which included, among other
things, the addition of a helicopter hangar and the repositioning of the ship’s aft SPY-
1 radar arrays. Prior to implementing the Flight IIA design, the Navy seriously
considered a version with even larger-scale changes, called the Flight III design, that
would have included, among other things, lengthening the ship’s hull to make room
for additional mission systems.
49 Statement of Ronald O’Rourke, Specialist in Naval Affairs, Congressional Research
Service, before the House Armed Services Committee Subcommittee on Seapower and
Expeditionary Forces hearing on Surface Combatant Warfighting Requirements and
Acquisition Strategy, July 31, 2008, 17 pp.

CRS-37
Compared to the option of procuring repeat Flight IIA DDG-51s, procuring a
modified version of the DDG-51 design would incur additional nonrecurring design
and engineering costs, as well as additional recurring production costs due to loss of
learning at the shipyard associated with changing the ship’s design and (for some of
the options discussed below) the enlargement of the ship. Depending on the exact
option pursued, the nonrecurring design and engineering costs could total in the
hundreds of millions of dollars. Given the number of DDG-51s that may be procured
between now and the procurement of a lead CG(X) in FY2015, FY2016, or FY2017,
these additional costs might be deemed cost effective in terms of making it possible
to procure DDG-51s that have lower O&S costs and are better aligned with a possible
policy goal of using DDG-51 procurement to provide the fleet with improved NSFS
or IAMD capabilities.
DDG-51 configuration options that may be procured in coming years include
but are not limited to the following:
! the current Flight IIA design;
! a modified version with additional features for reducing O&S costs;
! a modified version with additional features for reducing O&S costs
and an AGS;
! a modified version with additional features for reducing O&S costs
and additional vertical-launch tubes;
! a modified version with additional features for reducing O&S costs
and an improved radar; and
! a modified version with additional features for reducing O&S costs,
additional vertical-launch tubes, and an improved radar.
Each of these options is discussed below. The first of these options might be
ready for implementation sooner than the others. If so, and if procurement of a
modified DDG-51 design were desired, procurement of DDG-51s over the next
several years could begin with procurement of the current Flight IIA design and then
shift to the modified design when the modified design was ready for procurement.
Although the option of procuring the current Flight IIA DDG-51 design might
be ready for implementation sooner than the other options, the Navy and other
observers have cautioned that the time line for restarting procurement of the current
Flight IIA design could be extended by the need to restart or reestablish vendors for
certain key DDG-51 components, such as the reduction gear.
Current Flight IIA Design. This option, which might be considered the
baseline option, has the lowest nonrecurring design and engineering costs and the
lowest recurring production costs of all the options presented here. It would
maximize the number of DDG-51s that could be procured for a given amount of
procurement funding. It would also pose the lowest amount of technical, schedule,
and cost risk. It would have higher life-cycle O&S costs then the next option

CRS-38
discussed below, and perhaps higher O&S costs than some of the other options
discussed below as well. Procuring the current Flight IIA design would provide more
of the same capabilities that DDG-51s currently provide for the fleet, but the ships
might not be considered particularly well-aligned if a possible policy goal was to use
DDG-51 procurement to provide improved (as opposed to additional) capabilities for
NSFS or IAMD. As mentioned above, the current Flight IIA design could be
procured as a bridge to procurement of one of the modified designs discussed below.
Version with Features for Reducing O&S Costs. This option would
procure Flight IIA ships that were modified to include features for reducing the ships’
annual O&S costs. Potential features of this kind include but are not limited to the
following:
! adding automated equipment and making other changes to reduce
crew size;
! adding some electric-drive equipment for interconnecting parts of
the ship’s mechanical-drive propulsion system so as to permit the
system to operate more like an integrated electric drive system; and
! installing a near-surface bow bulb above the existing sonar dome to
improve hydrodynamic efficiency.
The discussion below of how these three features could reduce DDG-51 O&S
costs uses as its starting point the table below on annual DDG-1000 and DDG-51
O&S costs, which is reprinted from Admiral Gary Roughead’s May 7, 2008, letter
to Senator Kennedy on the DDG-1000 and DDG-51.50
(FY$M)
DDG 1000
DDG 51
Operating
$18.5
$15.7
(steaming)
Maintenance
$10.3
$5.6
Manpower
$8.5
$19.9
Total
$37.3
$41.2
Crew Size
[Total 120]
[Total 296]
14 officers
24 Officers
106 enlisted
272 Enlisted
Source: Letter dated May 7, 2008, from Admiral G. Roughead to the Honorable
Edward M. Kennedy, p. 2. The figures shown in brackets for total crew size were
added to the table by CRS.
50 Source: Letter dated May 7, 2008, from Admiral G. Roughead to the Honorable Edward
M. Kennedy, posted on the Internet at InsideDefense.com (subscription required) on May
30, 2008.

CRS-39
Reducing Crew Size. Admiral Roughead’s letter states that the above table
“does not include personnel reduction savings expected from the DDG
Modernization program.” The Navy informed CRS on July 25, 2008, that the DDG-
51 modernization is not expected to reduce DDG-51 crew size, but that the size of
the DDG-51 crew has, for other reasons, been reduced recently from the figure of 296
shown in the table to 278, a reduction of 18 people.51
Additional actions might permit a further reduction in DDG-51 crew size: a
2003 industry briefing to CRS on DDG-51 modernization for reduced manning
discussed various steps for reducing crew size by about 100.52 The House Armed
Services Committee’s report (H.Rept. 108-491 of May 14, 2004) on the FY2005
defense authorization bill (H.R. 4200) similarly stated:
The committee notes that the Navy is scheduled to commence a DDG-51
modernization plan in fiscal year 2005 with new construction and subsequently
extend modernization to in-service destroyers. The committee is aware that the
foundations for DDG-51 modernization are: increased warfighting capability,
leverage of the DDG — 51 shipbuilding program, reduction of total ship
ownership costs, and use of open architecture. In addition to those factors, the
committee believes that reduction in crew size from the present approximately
300 to an objective of 200 personnel should also be part of the foundation of an
even more aggressive modernization program.
According to the Navy, a DDG-51 class ship costs $25.0 million per year
to operate, including $13.0 million for the crew. The Navy estimate is that its
present modernization plan could reduce the crew cost per ship by $2.7 million
per year. A larger reduction in crew size would clearly appear to result in
significant savings over the estimated 18 years of remaining normal service life,
especially noting that per capita personnel costs may be expected to increase
during that period.53
Using the figures in the table from Admiral Roughead’s May 7 letter, if
additional steps can reduce ship crew size by another 32 people, for a total reduction
of 50 — one-half the figure of 100 mentioned in the 2003 industry briefing and the
2004 committee report — then annual manpower costs for the DDG-51 could be
reduced from the figure of $19.9 million shown in the table to about $16.5 million,
a reduction of about 17%.
Addition of Some Electric-Drive Equipment. As discussed in two CRS
reports,54 one maker of electric-drive propulsion equipment has proposed increasing
the planned scope of the Navy’s program for modernizing its DDG-51s to include
51 Source: Navy information provided to CRS by telephone, July 25, 2008.
52 Source: Industry briefing to CRS on DDG-51 modernization for reduced manning, August
8, 2003.
53 H.Rept. 108-491, pp. 122-123.
54 CRS Report RL33360, Navy Ship Propulsion Technologies: Options for Reducing Oil Use
— Background for Congress
, by Ronald O’Rourke, and CRS Report RS22595, Navy Aegis
Cruiser and Destroyer Modernization: Background and Issues for Congress
, by Ronald
O’Rourke.

CRS-40
adding some electric-drive propulsion equipment to the ships’ existing
mechanical-drive propulsion plants. The option could also be applied to new-
construction DDG-51s. The added equipment would more fully interconnect the
mechanical-drive components on each ship, producing what the firm refers to as a
hybrid propulsion plant. The firm estimates that the addition of this equipment
would reduce DDG-51fuel use by about 16%. This option, the firm estimates, would
have a non-recurring engineering cost of $17.1 million and a recurring cost
(including both equipment cost and installation cost) of $8.8 million per ship.55
Using the figures in the table from Admiral Roughead’s May 7 letter, reducing
DDG-51 fuel use by 16% would reduce the ship’s annual operating (steaming) cost
from the figure of $15.7 million shown in the table to about $13.2 million — a
reduction of about $2.5 million. The Navy has informed CRS that the operating
(steaming) cost figures in the May 7 letter are based on fuel costs as of February 2008
and reflect a fuel cost of $112.14 per barrel.56 If fuel in coming years costs more than
$112.14 per barrel, the dollar savings associated with a 3.9% reduction in fuel use
would be greater than $2.5 million per year. The obverse would be true if fuel in
coming years costs less than $112.14 per barrel.
Adding a Near-Surface Bow Bulb. As discussed in a CRS report,57 a study
by the Navy’s David Taylor Model Basin estimated that fitting a near-surface bow
bulb — essentially a shaped piece of steel — onto a DDG-51class destroyer could
reduce its fuel use by 3.9%.58
55 Source: Briefing by the firm DRS dated December 19, 2007, with estimated percentage
fuel-savings and cost figures reconfirmed by telephone call with CRS on July 17, 2008.
DRS also stated in the phone call that one Navy official had stated that the reduction in fuel
use could be greater than DRS estimates because the commanders of ships with this
equipment would likely adjust ship speeds to operate the ship more often at the hybrid
system’s most-efficient speed points (i.e., the system’s “sweet spots”).
56 Source: Navy information provided to CRS by telephone, July 25, 2008.
57 CRS Report RL33360, Navy Ship Propulsion Technologies: Options for Reducing Oil Use
— Background for Congress
, by Ronald O’Rourke.
58 Dominic S. Cusanelli, “Stern Flaps and Bow Bulbs for Existing Vessels, Reducing
Shipboard Fuel Consumption and Emissions,” available online at [http://www.unep.fr/
o z o n a c t i o n / e v e n t s / m i l i t a r y / p r o c e e d i n g s / P r e s e n t a t i o n % 2 0 M a t e r i a l /
24%20-%20Cusanelli%20-%20SternFlaps.doc]. The study is undated but refers to a test that
was “recently completed in Dec. 2000.” As also stated in CRS Report RL33360, an earlier
(1994) study by the same organization estimated that 79 existing Navy cruisers and
destroyers could be fitted with bow bulbs for a total development and installation cost of
less than $30 million, and that the constant-dollar life-cycle fuel savings of the 79 ships
would be $250 million. (Dominic S. Cusanelli, “Development of a Bow for a Naval Surface
Combatant which Combines a Hydrodynamic Bulb and a Sonar Dome,” paper presented at
the American Society of Naval Engineers Technical Innovation Symposium, September
1994.) DOD stated in 2000 that fitting bulbous bows onto 50 DDG-51s (a total of 62
DDG-51s have been procured) could save $200 million in life-cycle fuel costs. (U.S.
Department of Defense, Climate Change, Energy Efficiency, and Ozone Protection,
Protecting National Security and the Environment
. Washington, 2000. (Office of the
Deputy Under Secretary of Defense (Environmental Security), November 2000) p. 5.
(continued...)


CRS-41
Figure 1. Near-Surface Bow Bulb Design
for DDG-51
(bulb above, existing sonar dome below)
A document from the hydromechanics department of the Naval Surface Warfare
Center Carderock Directorate summarizing efforts by that department through 1999
to improve the hydrodynamic and operational performance of the DDG-51 similarly
states that in tests of this proposal:
Ship performance improvement was projected for the entire ship speed range
across all sea states tested, resulting in significant annual fuel savings.
Analysis of seakeeping data and extreme sea wave load tests indicate that
the bow bulb had no significant impact on ship motions or hull girder loads.
Acoustic transfer function tests data from a vibracoustic model concluded that
the bow bulb should have little noticeable impact on the sonar self-noise levels.59
Using the figures in the table from Admiral Roughead’s May 7 letter, reducing
DDG-51 use by an additional 3.9% would reduce the ship’s annual operating
(steaming) cost from the figure of $15.7 million shown in the table to about $12.7
million — a reduction of $3.0 million. This savings figure is again based on a fuel
cost of $112.14 per barrel.
Summary of Potential O&S Cost Reductions. Table 5 below
summarizes the potential reductions in annual DDG-51 O&S costs from the three
options discussed above. The total figure of $34.8 million shown in the final column
of the table is about 15% less than the figure of $41.2 million from the table in
58 (...continued)
Available online at [https://www.denix.osd.mil/denix/Public/Library/Air/Climate_Change/
dodclimatechange.pdf].)
59 Document entitled “Recent Design Programs, DDG 51,” available online at
[http://www.nswccd.navy.mil/hyd/mul-gal/doc-gal-1/documents/DDG51.pdf].

CRS-42
Admiral Roughead’s May 7 letter. These figures would need to be adjusted for the
options discussed later in this statement to take into account the configuration
changes of those options.
Table 5. DDG-1000 and DDG-51 Annual O&S Costs
DDG 51 with
potential O&S
(FY$M)
DDG 1000
DDG 51
cost reductions
Operating (steaming)
$18.5
$15.7
$12.7
Maintenance
$10.3
$5.6
$5.6
Manpower
$8.5
$19.9
$16.5
Total
$37.3
$41.2
$34.8
Crew Size
120 Total
296 Total
246 Total
(14 officers
(24 Officers
106 enlisted)
272 Enlisted)
Source: Letter dated May 7, 2008, from Admiral G. Roughead to the Honorable Edward M.
Kennedy, p. 2 (first two data columns) and CRS review of Navy and industry data (third
data column).
Version with Reduced O&S Costs and an AGS. This version of the
DDG-51 design would include an AGS as well as features for reducing O&S costs.
The purpose in procuring this version would be to provide the fleet with improved
NSFS capabilities. Under this option, the Flight IIA design would be modified by
removing the 5-inch gun and perhaps also the forward 32-cell vertical launch system
(VLS) battery, lengthening the ship forward of the deckhouse through the insertion
of a hull plug, and installing an AGS with a magazine capable of storing as many
LRLAP rounds as can be fitted, with a goal of 300.
Some of the sources that CRS consulted expressed doubts or concerns about the
technical feasibility or engineering difficulty of this option. Other sources expressed
fewer concerns along these lines. A redesign of the AGS’s ammunition storage and
handling space would be needed to accommodate the AGS in the DDG-51 hull.
The Navy informed CRS in 2005 that it might be possible to fit the existing
DDG-51 hull with one AGS, that doing so would likely require the removal of 5-inch
gun and the forward 32-cell VLS battery, and that in this configuration, the DDG-51
might carry about 120 LRLAPs.60
At a March 14, 2008, hearing on shipbuilding issues before the Seapower and
Expeditionary Forces subcommittee of the House Armed Services Committee, Vice
Admiral Barry McCullough was asked what platforms other than the DDG-1000
might be equipped with an AGS. He replied:
Well, sir, I will tell you we looked at [whether] could you put the Advanced
Gun System in an Arleigh Burke [DDG-51] hull. And without doing a detailed
60 Source: Navy briefing to CRS on DDG-1000 and DDG-51 capabilities, June 10, 2005.

CRS-43
shock analysis on it, I will tell you physically it fits. We’d have to do some
arrangement changes in it. But you can put the gun in there. And my concern is
the magazine capacity. Outside of that, we haven’t looked at putting it in any
other hull form. So I’ll get back to you on that.61
This comment, like the information that the Navy provided to CRS in 2005,
appears to relate to an installation that does not involve lengthening the DDG-51 hull.
Lengthening the DDG-51 hull forward of the deckhouse could provide additional
space and weight-carrying capacity for additional LRLAP rounds, and perhaps also
permit the retention of the forward 32-cell VLS battery. The Navy and industry in
the past have studied options for lengthening the DDG-51 hull by various lengths to
accommodate various capability upgrades, such as additional VLS cells;62 the
maximum possible hull extension might be 55 or 56 feet.63 An extension of 55 or 56
feet might permit a magazine of more than 300 rounds, or alternatively might permit
the retention of at least some of the ship’s forward VLS cells.
Because the AGS requires much more electrical power to operate than the
DDG-51’s current 5-inch gun, equipping the DDG-51 with an AGS might require the
installation of an additional electrical generator. The best location for such a
generator might be in one of the ship’s two helicopter hangar spots, which would
reduce the ship’s helicopter hangar capacity from two helicopters to one.
Version with Reduced O&S Costs and Additional Vertical-Launch
Tubes. This version of the DDG-51 design would include additional vertical-launch
61 Source: Transcript of hearing. The idea of backfitting an AGS onto an existing Spruance
(DD-963) class destroyer, so that the ship could be used as a risk-reduction platform for the
DDG-1000, was explored by a group of three Navy lieutenants in a 2003 study done while
at the Massachusetts Institute of Technology. The study’s preferred installation option,
which involved the removal of the ship’s aft 5-inch gun but no hull extension, resulted in
a magazine with an estimated capacity of 304 LRLAP rounds. (Julie Higgins, Jason Rhoads,
and Michael Roach, Advanced Gun System (AGS) Backfit, DD-988 Naval Gunfire Support
Ship Conversion
, Massachusetts Institute of Technology, 13.413, Project in Naval Ship
Construction, Spring 2003, 30 pp.)
62 For example, the Navy in 1988 studied design options for a Flight III version of the
DDG-51 design that included hull extensions, in various locations along the hull, of 30 feet,
40 feet, and 46 feet. The CNO gave initial approval to a Flight III design concept
incorporating a 40-foot extension (12 feet forward and 28 feet aft), and the design was
intended to begin procurement in FY1994. (Source: Donald Ewing, Randall Fortune, Brian
Rochon, and Robert Scott, DDG 51 Flight III Design Development, Presented at the
Meeting of the Chesapeake Section of The Society of Naval Architects and Marine
Engineers, December 12, 1989.) The Flight III design was canceled in late-1990/early-1991.
Subsequent studies led to the current Flight IIA design, which does not include a hull
extension. A 1994 CRS report discussed the option of lengthening the DDG-51 design by
about 12 feet to increase the forward VLS battery from 32 cells to 64 cells. (See CRS
Report 94-343 F, Navy DDG-51 Destroyer Procurement Rate: Issues and Options for
Congress
, by Ronald O’Rourke [April 25, 1994; out of print and available directly from the
author]), pp. CRS-27 to CRS-28.
63 Sources: Recent discussions with industry officials and Navy information provided to
CRS in 1997.

CRS-44
tubes as well as features for reducing O&S costs. The purpose in procuring this
version would be to provide the fleet with improved IAMD capabilities.
Additional vertical-launch tubes could be installed by lengthening the ship’s hull
forward of the deckhouse. A 1994 CRS report discussed, on the basis of Navy
information, how a 12-foot extension could permit the installation of 32 additional
VLS cells.64 In 1997, to support research that CRS was conducting into possible
alternatives to the Navy’s proposed Arsenal Ship,65 the Navy provided CRS with
information on how lengthening the DDG-51 hull so as to install additional VLS
tubes might change the ship’s procurement cost. The information is summarized in
Table 6 below. The estimated changes in procurement cost were parametric, rough
order of magnitude (ROM) estimates only, subject to further engineering evaluation,
and did not include detail design or nonrecurring engineering costs. Although the
table shows variants equipped with Mk 41 VLS tubes (the kind currently used on
Navy surface ships), adding vertical launch tubes of a newer design may also be
possible.
64 See CRS Report 94-343 F, Navy DDG-51 Destroyer Procurement Rate: Issues and
Options for Congress
, by Ronald O’Rourke [April 25, 1994; out of print and available
directly from the author]), pp. CRS-27 to CRS-28.
65 The Arsenal Ship program was aimed at acquiring a small number of relatively simple and
inexpensive surface ships, each armed with about 512 VLS tubes. The program was
cancelled in 1997. For more on the program, see CRS Report 97-455 F, Navy/DARPA
Arsenal Ship Program: Issues and Options for Congress
, by Ronald O’Rourke, and CRS
Report 97-1004 F, Navy/DARPA Maritime Fire Support Demonstrator (Arsenal Ship)
Program: Issues Arising From Its Termination
, by Ronald O’Rourke.

CRS-45
Table 6. 1997 Navy Information on DDG-51 Variants
Rough
Number of Mk 41
Number
recurring
VLS tubes (%
of
Hull
procurement
change relative to
5-inch
extension
cost (relative
Variant
Flight IIA)
guns
(in feet)
to Flight IIA)
Current Flight
96
1
0
1.00
IIA design
Option 1
128 (+ 33%)
1
12
<1.05
Option 2
160 (+ 67%)
1
30
<1.10
Option 3
192 (+100%)
1
<56
<1.15
Option 4
256 (+167%)
1
56
<1.20
Source: U.S. Navy data provided to CRS on April 9, 1997, except for the figure of 12 feet
shown for the variant with 32 additional VLS cells, which is U.S. Navy data provided for
CRS Report 94-343 F, Navy DDG-51 Destroyer Procurement Rate: Issues and Options for
Congress
, by Ronald O’Rourke [April 25, 1994; out of print and available directly from the
author]). The cost figures in the table are rough order of magnitude (ROM) estimates and
do not reflect any detailed design or engineering costs typically reflected in a lead-ship cost.
The cost estimates provided by the Navy to CRS, though ROM estimates, were more precise
than shown here, and were labeled business sensitive. They have been rendered more
approximate by CRS for presentation in this table. The costs of the options as estimated by
the Navy did not differ from one another in exact increments of 5%. See also Figure 6 on
page 131 from Dean A. Rains, “Methods For Ship Military Effectiveness Analysis,” Naval
Engineers Journal
, March 1994: 126-135; and Table 3 on page 26 from Dean A. Rains,
“Naval Ship Affordability,” Naval Engineers Journal, July 1996: 19-30.
As shown in the table, all these options retain the DDG-51’s 5-inch gun. If the
gun is considered not critical for the ship’s intended concept of operations, it could
be eliminated from the design, which would reduce the design’s procurement cost.
Supporters of eliminating the 5-inch gun might argue that the gun is not critical
because it does not contribute to a goal of providing improved IAMD capabilities,
and because the Navy already has 106 5-inch guns on 22 existing Aegis cruisers (two
guns each) and 62 DDG-51s already in service or under construction (one gun each).
Opponents of eliminating the 5-inch gun could argue that the absence of a gun would
reduce the mission flexibility of the ship.
Version with Reduced O&S Costs and an Improved Radar. This
version of the DDG-51 design would include an improved radar in the place of the
DDG-51’s current SPY-1 radar, as well as features for reducing O&S costs. The
purpose in procuring this version would be to provide the fleet with improved IAMD
capabilities.
The improved radar would use active-array radar technology, as opposed to the
older passive-array technology used in the SPY-1. The active-array technology
would be similar to that used, for example, in the DDG-1000 dual band radar.
Multiple industry sources have briefed CRS on their proposals for modifying the
DDG-51 design to include an active-array radar with greater capability than the SPY-
1.

CRS-46
If the DDG-51 hull is not lengthened, then modifying the DDG-51 design to
include an improved radar would require removing the 5-inch gun to make space and
weight available for additional equipment needed to support operations with the
improved radar. Lengthening the hull might provide enough additional space and
weight capacity to permit the 5-inch gun to be retained.66 Supporting equipment to
be installed would include an additional electrical generator and additional cooling
equipment.67 The best location for the generator might be in one of the ship’s two
helicopter hangar spots, which would reduce the ship’s helicopter hangar capacity
from two helicopters to one.
Due to the higher cost of the improved radar compared with the SPY-1 and the
cost for the additional generator and cooling equipment, modifying the DDG-51
design to this configuration would increase the recurring procurement cost of the
ship. Information provided to CRS by industry suggests that if the hull is not
lengthened, the increase might be in the general range of $100 million, or perhaps or
more. If the hull were lengthened, the cost increase would be greater.
Version with Reduced O&S, Additional Tubes, and an Improved
Radar. This version of the DDG-51 design would include both additional vertical-
launch tubes and an improved radar, as well as features for reducing O&S costs. The
purpose in procuring this version would be to provide the fleet with improved IAMD
capabilities. This option would require the hull to be lengthened. The resulting ship
would be more expensive in all respects (nonrecurring design and engineering costs,
procurement costs, and annual O&S costs) and more capable than the other options
discussed here.68 If the ship’s hull were lengthened by 55 or 56 feet, the resulting
ship might be roughly 25% more expensive to procure than the current Flight IIA
design, or perhaps more than that.
DDG-51 Modernization Program. Policymakers may consider the option
of altering the current program for modernizing existing DDG-51s69 so as to produce
modernized ships with configurations similar to the modified configurations
discussed above for new-construction DDG-51s. Each of the modified
configurations discussed above might be achievable through modernizations of
existing DDG-51s.
Altering the DDG-51 modernization program to include such changes to the
ship configuration would
66 Some sources consulted by CRS believe that the 5-inch gun could be retained, even if the
hull is not lengthened.
67 Some sources consulted by CRS believe that an additional electrical generator might not
be needed.
68 Depending on the amount of reduction in annual O&S costs, it is possible that this ship
might be comparable to, or less expensive than, a baseline DDG-51 Flight IIA in terms of
annual O&S costs.
69 For more on this program, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.

CRS-47
! increase the cost of the modernization program;
! increase the amount of shipyard work associated with each
modernization, which could have implications for supporting the
shipbuilding industrial base (see discussion below);
! produce ships with lower O&S costs than currently planned;
! produce ships that are aligned more closely with a possible policy
goal of providing the fleet with improved NSFS or IAMD
capabilities; and
! permit the modernization effort to produce ships with improved
NSFS capabilities while the new-construction effort produces ships
with improved IAMD capabilities, or vice versa, thus pursuing both
of these potential policy goals.
DDG-1000 Design Options
DDG-1000 design options that policymakers may consider include but are not
necessarily limited to those discussed below. As with the DDG-1000 options
discussed above, modifying the DDG-1000 design could incur additional
nonrecurring design and engineering costs, and could affect the estimated
procurement cost of the ship.
Procuring a modified DDG-1000 design that includes additional
vertical launch tubes rather than AGSs. This option would more closely align
the DDG-1000 design with a goal of providing the fleet with improved IAMD
capabilities by removing the ship’s two AGSs and their magazines and using the
freed-up space for additional vertical launch tubes.
Procuring a modified DDG-1000 design that includes additional
vertical launch tubes rather than AGSs, and also a higher-capability
radar.
This option, which would also more closely align the DDG-1000 design with
a goal of providing the fleet with improved IAMD capabilities, is similar to the
previous option, except that the DDG-1000 would also be equipped with a radar with
more capability than the radar in the current DDG-1000 design. (The higher-
capability radar would use active-array technology, like the current DDG-1000 radar,
but would use that technology in a radar with more fully populated arrays.) A radar
with a certain amount of additional capability could be accommodated without
redesigning the DDG-1000 deck house; a radar with a greater amount of additional
capability could be accommodated through a partial redesign of the deckhouse (i.e.,
a redesign that would affect the deckhouse but not require a change to the ship’s
basic hull design). Due to the space needed for the additional cooling units that
would be needed to support a higher-capability radar, this option might result in a
smaller number of additional vertical launch tubes than the previous option.
Procuring a modified DDG-1000 design equipped with a sonar
optimized for blue-water ASW. This option would more closely align the
DDG-1000 design with a goal of providing the fleet with improved blue-water ASW

CRS-48
capabilities by replacing the DDG-1000’s current bow-mounted sonar, which is
optimized for littoral (i.e., near-shore) ASW operations, with a bow-mounted sonar
optimized for blue-water ASW operations. The new sonar could be the same as, or
similar to, the DDG-51’s bow-mounted sonar. This option might be combined with
either of the two previous options to provide the fleet with improved IAMD and blue-
water ASW capabilities.
Non-combat Adjunct Ship with Powerful Radar
Another option that policymakers may consider for improving the fleet’s IAMD
capabilities in the near term (i.e., prior to the start of CG(X) procurement) would be
to procure a non-combat ship equipped with a powerful radar to act as an adjunct
platform for missile defense operations and perhaps also air defense operations. The
radar on the ship would be a large, active-array radar that would be considerably
more powerful, for example, than the improved radar that could be installed on a
modified DDG-51. The presence in the fleet of such a radar could significantly
improve the fleet’s IAMD capabilities. The ship might be similar to the Cobra Judy
Replacement ship currently under construction.70 A few or several such adjunct ships
might be procured, depending on the number of theaters to be covered, requirements
for maintaining forward deployments of such ships, and their homeporting
arrangements. The ships would have little or no self-defense capability and would
need to be protected in threat situations by other Navy ships.
Modified CG-47s with Improved Radar
Another option that policymakers may consider to improve the fleet’s IAMD
capabilities in the near term would be to alter the current program for modernizing
Aegis cruisers (CG-47s)71 so as to include the installation of an improved radar. This
option would involve replacing the SPY-1 radar on existing CG-47s with an
improved radar using active-array technology similar to the technology used in the
current DDG-1000 radar. This option would require the removal of one of the CG-
47’s two 5-inch guns, as well as the removal of some other mission equipment. It
would also require replacing the ship’s electrical generators and cooling equipment
with more capable models, and replacing the ship’s electrical distribution system.
LPD-17 Hull Equipped with AGSs
Another option that policymakers may consider for improving the fleet’s NSFS
capabilities would be to procure a modified LPD-17 hull equipped with two AGSs
has been suggested by both the Congressional Budget Office (CBO) and the Center
70 The Cobra Judy Replacement (CJR) ship is intended to replace the missile range
instrumentation ship Observation Island (TAGM-23). Observation Island is a converted
merchant ship operated by the Navy for the U.S. Air Force. The ship is equipped with a
powerful radar, called Cobra Judy, that is used for collecting technical information on
foreign-country ballistic missiles in flight. For more on the CJR program, see
[http://acquisition.navy.mil/programs/information_communications/cjr]
71 For more on this program, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.

CRS-49
for Strategic and Budgetary Assessments (CSBA) as a potential alternative to
procuring DDG-1000s. The two guns and their magazines would be installed in the
aft part of the ship, which would degrade or eliminate the LPD-17 design’s well deck
and aviation capabilities. CBO estimated in 2006 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.72
72 See Congressional Budget Office, Options for the Navy’s Future Fleet, May 2006, pp. 56-
57 (Box 3-1).

CRS-50
Appendix D. DDG-1000 Oversight Issues
for Congress
This appendix presents some oversight issues for Congress specifically
regarding the DDG-1000 program. Prior to the Navy’s announcement in late July
2008 that it wanted to stop DDG-1000 procurement at two ships and restart DDG-51
procurement, these and other DDG-1000 program oversight issues were presented
in the main body of this CRS report.
Accuracy of Navy Cost Estimate
One potential oversight issue for Congress specific to the DDG-1000 program
concerns the accuracy of the Navy’s cost estimate for the program.
CBO June 2008 Report. The Congressional Budget Office (CBO) believes
that the Navy is significantly underestimating DDG-1000 procurement costs. CBO
reported in June 2008 that it believes the first two DDG-1000s will each cost about
56% more than the Navy estimates, that the other five ships in the program would
each cost about 64% more than the Navy estimates, and that the complete seven-ship
class consequently would cost about 60% more than the Navy estimates. CBO
reported that:
The [Navy’s FY]2009 budget suggests that the Navy expects the first two [DDG-
1000s] to cost $3.2 billion each [in constant FY2009 dollars] and the next five
to cost an average of $2.2 billion each [in constant FY2009 dollars] — a cost
increase of about $200 million per ship [in constant FY2009 dollars] for the last
five ships compared with the cost in the Navy’s 2008 budget. CBO, by contrast,
estimates that the first two DDG-1000s would cost $5.0 billion apiece [in
constant FY2009 dollars] and that the next five would cost an average of $3.6
billion each [in constant FY2009 dollars].
The Navy’s estimate for the two lead-ship DDG-1000s prices the ship at
about $250 million (in 2009 dollars) per thousand tons of lightship displacement
(the weight of the ship minus its crew, fuel, ammunition, and stores). In
comparison, the lead ship of the DDG-51 class destroyer cost about $390 million
per thousand tons [in constant FY2009 dollars], and the lead ship of the
Ticonderoga class cruiser cost more than $400 million per thousand tons [in
constant FY2009 dollars].... CBO used the DDG-51 lead-ship cost as its basis for
estimating the cost of the lead ship of the DDG-1000 class, adjusting for the size
of the ship.
The Navy has asserted that the basis for CBO’s estimate may not be valid
because the DDG-51 had a number of problems in the early stages of its
construction that should not be expected to occur during the construction of the
first DDG-1000s. In particular, the design of the lead DDG-51 was disrupted and
delayed because a new design tool being used at the time was incomplete and not
well understood. It had to be abandoned and the design restarted using more
traditional methods. The design of the lead DDG-51 was thus about 20 percent
complete when construction began. In comparison, according to the Navy, the
design of the DDG-1000 is progressing far more smoothly; the Navy expects to
have the design 85 percent complete when construction begins this summer. In

CRS-51
addition, the DDG-51 is a smaller, more densely built ship; therefore, the Navy
believes that on a ton-for-ton basis, it has been more difficult to build than the
DDG-1000 class is going to be.
Although the Navy may not encounter the same problems constructing the
lead DDG-1000s that it did when constructing the lead DDG-51, it is CBO’s
view that the service is likely to encounter other problems that will increase the
costs of the DDG-1000 and delay its construction. As Navy officials have stated,
lead ships are often very difficult to build, and many problems typically occur
during construction. Problems with the first littoral combat ships (for which costs
doubled) and with the lead ship of the LPD-17 class amphibious transport dock
(for which costs increased by 80 percent and construction time more than
doubled) illustrate the difficulties the Navy has encountered recently in
constructing lead ships. Both the LCS and the LPD-17 are much less complex
technologically than the DDG-1000 will be. And Navy officials have stated that
the Virginia class submarine program was at about the same point in its design
that the DDG-1000 will be when construction of those new submarines began.
Nevertheless, the cost of the first two ships of the Virginia class exceeded their
budget by an average of 17 percent. Moreover, the DDG-1000 program is
incorporating 10 major new technologies into the lead ship of the class compared
with the technologies used in the previous-generation DDG-51 destroyer. Those
technologies include electric drive and a distributed power system, a tumblehome
hull (one in which the sides of the ship slope outward to increase stealthiness),
an advanced gun system, new radars, and composite materials and stealthy
coatings for the deckhouse. In the past, the Navy typically introduced three or
four major new technologies into a new class of surface combatant.
Comparing the Navy’s estimate for two additional DDG-51s and the Navy’s
estimate for the seventh DDG-1000 to be purchased in 2013 illustrates the risk
for cost growth in the latter program. Last year, the Navy stated that if the
Congress authorized and bought two new DDG-51s in 2008 — ships that would
have the benefit of substantial efficiencies and lessons learned because of the 62
similar ships built previously — the cost would be between $3.1 billion and $3.2
billion, or about $1.6 billion each in 2009 dollars. At the same time, in its fiscal
year 2009 budget submission to the Congress, the Navy stated that the cost to
build the seventh DDG-1000 in 2013 would be about $2.4 billion in 2013 dollars.
Deflating the cost of the seventh DDG-1000, using the inflation index for
shipbuilding that the Navy provided to CBO, brings the Navy’s estimate for that
ship to about $1.9 billion in 2009 dollars. The lightship displacement of the
DDG-1000 is about 5,000 tons (or more than 50 percent) greater than the
lightship displacement of the DDG-51s under construction today. In effect, the
Navy’s estimates imply that those 5,000 extra tons, as well as the 10 new
technologies being incorporated into the DDG-1000 class, will add only 15
percent, or about $300 million, to the ship’s cost.73
CBO also stated:
Recent developments in the DDG-1000 program could change CBO’s
estimate. Each of the two shipbuilders plans to build about 25 percent of the
seven individual ships. The remaining 50 percent of each ship would be built by
73 Congressional Budget Office, Resource Implications of the Navy’s Fiscal Year 2009
Shipbuilding Plan June 9, 2008
, pp. 20-23.

CRS-52
the home shipyard, wherein one builder would construct four destroyers and the
other, three. This “teaming” arrangement, somewhat similar to the teaming
arrangement used to build Virginia class attack submarines, would in effect allow
half of the content of the seventh ship to benefit from experience developed
during the construction of the six previous ships; the other half of the ship’s
content would benefit from lessons learned during the construction of only three
ships. In addition, the Navy has placed both of the lead ships under contract, with
fixed-price contracts for the materials that will be used to construct the ships.
CBO did not have sufficient data or time to evaluate the effect that these and
other developments could have on its estimate but will do so in future analyses
and updates of this report.74
CBO also stated:
The relatively simple design of the LCSs and the substantial cost increases
that have occurred in the program suggest that the Navy may also have trouble
meeting its cost targets for the larger, much more complex surface combatants
in its shipbuilding plan, such as the DDG-1000 and the CG(X).75
GAO July 2007 Testimony. Although the Navy publicly stands by its DDG-
1000 cost estimates, the Government Accountability Office (GAO) testified in July
2007 that the Navy had assigned a confidence level of about 45% to its own
estimates, meaning that the Navy itself believed there was about a 55% chance that
DDG-1000s will exceed the Navy’s estimates. GAO testified that:
One way to improve the cost-estimating process is to present a confidence
level for each estimate, based on risk and uncertainty analyses. By conducting
an uncertainty analysis that measures the probability of cost growth, the Navy
can identify a level of confidence for its estimates and determine whether
program costs are realistically achievable. Navy cost analysts told us that they
used quantitative risk analyses to test the validity of cost estimates of CVN 78
and DDG 1000. We believe that the Navy and the Department of Defense (DOD)
should take this a step further — requiring a high confidence level threshold
when making program commitments and budget requests. The Defense
Acquisition Performance Assessment Panel recommended an 80 percent
confidence level, meaning that a program has an 80 percent chance of achieving
its estimated costs. Whether this is the right level warrants thoughtful discussion,
but it is worth noting that analyses for CVN 78 and DDG 1000 were well below
an 80 percent confidence level (in the case of DDG 1000 at around 45 percent)
— increasing the likelihood that costs will grow above budget.76
GAO’s July 2007 testimony was presented while Congress was considering the
Navy’s proposed FY2008 budget. In its proposed FY2009 budget, the Navy has
74 Ibid, p. 23 (footnote 16).
75 Ibid, p. 27.
76 Government Accountability Office, Defense Acquisitions[:] Realistic Business Cases
Needed to Execute Navy Shipbuilding Programs, Statement of Paul L. Francis, Director,
Acquisition and Sourcing Management Team, Testimony Before the Subcommittee on
Seapower and Expeditionary Forces, Committee on Armed Services, House of
Representatives
, July 24, 2007 (GAO-07-943T), pp. 17-18.

CRS-53
increased its estimate of DDG-1000 procurement costs by about 6.9%.77 In light of
this increase, it is possible that the Navy’s confidence level has increased from 45%
to some higher figure.
October 2007 Report on CAIG Estimate. On October 1, 2007, it was
reported that the Cost Analysis Improvement Group (CAIG), a cost-estimating office
within the Office of the Secretary of Defense, had estimated that the first two DDG-
1000s would together cost about $7.2 billion to procure, or about 14% more than the
Navy’s combined estimate for the two ships in 2007.78
Program Affordability and Cost Effectiveness
A second potential oversight issue for Congress specific to the DDG-1000
program concerns the affordability and cost effectiveness of the DDG-1000 program.
Prior to the July 31, 2008, hearing before the Seapower and Expeditionary Force
subcommittee of the House Armed Services Committee, the affordability and cost-
effectiveness of the DDG-1000 program was explored extensively at a two-part
hearing on the DDG-1000 program held on July 19 and 20, 2005, before the
Projection Forces subcommittee of the House Armed Services Committee. At the
end of the July 19 portion of the hearing, DOD and Navy witnesses were asked by
the subcommittee chairman, Representative Roscoe Bartlett, 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 the July 20 portion of the hearing,
Representative 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. The Navy’s current cost estimates for the first and fifth DDG-1000s are below
these figures; CBO’s current cost estimates for the first and fifth DDG-1000s are
substantially above these figures.
Technical Risk
A third potential oversight issue for Congress specific to the DDG-1000
program concerns technical risk in the program, which can affect the Navy’s ability
to build DDG-1000s on schedule and within budgeted costs. Over the past few years,
GAO has reported on the technical risks involved in developing the several
significant new technologies that are to be incorporated into the DDG-1000. The
Navy over the years has worked to retire these risks. GAO reported in March 2008
that:
77 Under the FY2008 shipbuilding plan, the Navy estimated the combined end cost of the
seven DDG-1000s at $18,185 million in then-year dollars; under the FY2009 shipbuilding
plan, the Navy estimates their combined end cost at $19,136 million in then-year dollars.
There is no change in the years in which the ships are to be procured.
78 “Sticker Price,” Defense Daily, October 1, 2007. See also Christopher P. Cavas, “DDG
1000 Contract Talks Hit Rough Seas,” DefenseNews.com, October 15, 2007, which refers
to “a recent non-Navy estimate” of $7.2 billion for the two ships.

CRS-54
Three of 12 DDG 1000 critical technologies are fully mature, having been
demonstrated in a sea environment. While 7 other technologies are approaching
full maturity, 5 of them will not demonstrate full maturity until after installation
on the ship. Two technologies remain at lower levels of maturity — the volume
search radar and total ship computing environment. Land-based testing of a
volume search radar prototype is expected to begin in May 2008 — a delay of
over 12 months since last year’s assessment. Software development for the total
ship computing environment has been replanned, shifting functionality to later
software blocks. The Navy plans on completing 85 percent of the ship’s detail
design prior to the start of construction....
The volume search and multifunction radars constitute the dual band radar
system. While the multifunction radar has been tested at sea, the volume search
radar continues to experience delays. Problems in developing the prototype and
constructing the test facility have delayed land-based testing of the volume
search radar by over a year. In order to support the ship construction schedule,
the Navy has begun initial testing at an alternate test site. Because of issues with
a critical circuit technology, the volume search radar will not demonstrate full
power output until at least 2010 — after production of the dual band radar is well
under way. Problems or delays discovered during testing will likely affect radar
production and installation.
The total ship computing environment includes hardware and six blocks of
software code. Current software development is focused on the fourth block. The
Navy has reduced its software development efforts in order to accommodate
available funding. As a consequence, some functionality has been deferred to
blocks five and six. The Navy believes that cost and schedule parameters will
still be achieved by leveraging non-development items and existing software
code. However, full maturity will not occur until after the start of ship
construction.
Of the seven technologies approaching full maturity, the Navy expects to
demonstrate full maturity of the integrated deckhouse and peripheral vertical
launch system by the start of ship construction in July 2008. Production of a
large-scale deckhouse test unit is under way and final validation of the vertical
launching system will occur in spring 2008. Practical limitations prevent the
Navy from fully demonstrating all critical technologies at sea prior to ship
installation. Testing of other technologies continues through ship construction
start.
Due to scheduling issues for the lead ships, the Navy did not have time to
fully test the integrated power system prior to shipyard delivery and instead
requested funds in fiscal year 2008 to procure an additional unit. The Navy will
conduct integrated power system testing in 2010 using this unit at a land-based
test site. Considerable software development remains and land-based testing will
mark the first integrated testing between the power generation and distribution
system and the control system. If problems are discovered during testing,
construction plans and costs could be at risk because the power systems needed
for the first two ships will already have been delivered to the shipyards.
The Navy continues to test prototypes of the ship’s hull form to
demonstrate stability in extreme sea conditions at higher speeds. According to
Navy officials, existing computer simulation tools over-predicted the ship’s
tendency to capsize. The Navy is now relying on testing of scale models in tanks

CRS-55
and on the Chesapeake Bay, and is updating its computer simulation tool.
Ongoing testing is aimed at developing guidance for operating the ship safely
under different sea conditions.79
Lockheed states that GAO’s discussion of the volume search radar is based on
outdated information, and that the development of the volume search radar is
proceeding well.80
As individual DDG-1000 technologies mature, technical risk in the DDG-1000
program will shift more to the follow-on task of system integration — of getting all
ship’s technologies to work together smoothly in a single platform. In past defense
acquisition programs, system integration has often proven to be at least as
challenging as the task of developing individual new technologies.
As mentioned in the Background Section, the Navy since September 30, 2005,
has been acting as the system integrator for the DDG-1000 program. Problems in the
execution of the Coast Guard Deepwater program81 and the Littoral Combat Ship
(LCS) program led to a reexamination in Congress in 2007 of the concept of the
private-sector lead system integrator (LSI), and to a desire among some Members to
shift certain acquisition functions, including system design and integration, from the
private sector, to where they had migrated starting in the 1990s, back to the federal
government. The Navy’s decision in 2005 to begin acting as the system integrator
for the DDG-1000 program will make the program an early test of DOD’s ability to
once again perform the system-integration function following the downsizing of
DOD’s technical and acquisition workforce that occurred when acquisition functions
were earlier transferred to the private sector. The DDG-1000 program, in addition
to being an early test of DOD’s abilities in this area, may represent a fairly
challenging test, given the number of significant new technologies that are to be
integrated into the ship.
In discussing the system-integration task, Navy officials argue that the DDG-
1000 program office has the authority and resources to access technical capacity
throughout the Navy, including expertise at Navy research, development, and testing
centers in various parts of the country. Navy officials also argue that the engineering
development models (EDMs) that it has used to develop key technologies for the
DDG-1000 have been designed not only to develop the ability of each technology to
work as a stand-alone item, but also to integrate well with other systems when
installed on the ship. Navy officials also argue that since its beginning in the 1980s,
the Navy has been responsible for managing a large number of contractors who make
various components of the DDG-51 (including the Aegis combat system) that are
then provided by the Navy to the shipbuilders as government-furnished equipment
(GFE). By comparison, Navy officials argue, the task of overseeing the integration
79 Government Accountability Office, Defense Acquisitions[:] Assessments of Selected
Weapon Programs
, GAO-08-467SP, March 2008, pp. 69-70.
80 Source: Lockheed perspective provided to CRS on July 3, 2008.
81 For additional discussion of the Deepwater program, see CRS Report RL33753, Coast
Guard Deepwater Program: Background, Oversight Issues, and Options for Congress
, by
Ronald O’Rourke.

CRS-56
of the DDG-100 combat system will require the Navy to work with only two
contractors (Raytheon and BAE).82
DDG-1000 Mission Requirements
A fourth potential oversight issue for Congress specific to the DDG-1000
program concerns the ship’s mission requirements, and whether they were
appropriately determined, particularly in the context of potential ship affordability.
The DDG-1000’s capabilities 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.83
DOD stated in 2005 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
DD(X) KPPs and provide the sustained, precision, long-range naval surface fire
support that the United States Marine Corps requires.84
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, stated 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
82 Source: Navy briefing to CRS and CBO on April 10, 2008.
83 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.
84 Ibid, pp. 6-7.

CRS-57
NAVSEA would have created a series of sketch designs for exactly that
purpose.85
An August 2005 trade press article suggested 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 Admiral Michael Mullen, who became the Chief of Naval
Operations on July 22, 2005, 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
85 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-58
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.”86
A March 2007 report from the Center for Strategic and Budgetary Assessments
(CSBA) made 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.87
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,
! raised questions about the implications of a tumblehome hull for the
ship’s ability to deal with underwater damage;88
! asked 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
! questioned 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.
86 Jason Sherman, “Mullen To Bring Back Panel To Control Ship Configuration, Cost,”
Inside the Navy, August 8, 2005.
87 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.)
88 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-59
The article, which refers to the DDG-1000 by the previous designation DD(X),
stated:
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

CRS-60
could be argued that the same anti-radar techniques would be effective in the
end-game in which missiles would approach the ship....
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-61
In that case, DD(X) may well be effectively invisible to them. So will a lot of
less thoroughly stealthy ships.89
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, be considered as possibly less critical by
comparison?
89 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-62
Appendix E. Comparisons of DDG-1000 and
DDG-51
This appendix provides information on the capabilities and costs of the DDG-
1000 and DDG-51 designs, as presented by the Navy and DOD on five occasions
prior to the July 31, 2008, hearing before the Seapower and Expeditionary Forces
subcommittee of the House Armed Services Committee:
! in July 19, 2005, Navy testimony before the Projection Forces
subcommittee of the House Armed Services Committee;
! at a June 10, 2005, Navy briefing to CRS;
! at an April 10, 2008, Navy briefing to CRS and CBO; and
! in a May 7, 2008, Navy letter to Senator Kennedy; and
! in a July 2, 2008, DOD letter to Representative Taylor.
Overview
The DDG-1000 and DDG-51 are both multimission destroyers, but they have
somewhat different mission emphases. The DDG-1000 design features a stronger
emphasis on land-attack operations and operations in littoral waters. The DDG-51
design is more oriented toward blue-water operations.
Consistent with its larger size, higher procurement cost, and greater use of new
technologies, the DDG-1000, the Navy believes, is more capable than the DDG-51
design in several respects. The Navy states that it designed the DDG-1000 for “full-
spectrum littoral dominance” and believes the DDG-1000 would be considerably
more capable than the DDG-51 in littoral operations. The Navy believes that because
of its reduced signatures, defensive systems, number of gun shells in its magazine,
and ability to resupply gun shells while underway, the DDG-1000 would have
considerably more capability than the DDG-51 to enter defended littoral waters and
conduct sustained operations there. The Navy believes that because of its guns,
aviation capabilities, special operations forces (SOF) support capabilities, and small-
boat capabilities, the DDG-1000 would be able to perform more littoral missions than
the DDG-51. The Navy believes that because of its radars and C4I/networking
capabilities, replacing a DDG-51 with a DDG-1000 in a carrier strike group would
increase the strike group’s anti-air warfare (AAW) capabilities by about 20%. The
Navy believes that because of differences in their sonar capabilities, the DDG-51 has
more blue-water anti-submarine warfare (ASW) capability than the DDG-1000.
July 19, 2005, Navy Testimony
At the July 19 portion of a July 19-20, 2005, hearing before the Projection
Forces subcommittee of the House Armed Services Committee, Navy officials
testified that, compared to the DDG-51 design, the DDG-1000 design’s capability
improvements include, among other things,

CRS-63
! a threefold 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;
! three times as much naval surface fire support capability, including
an ability to answer 90% of Marine Corps calls for fire within five
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;
! almost 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.90
90 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.

CRS-64
June 10, 2005, Navy Briefing to CRS
The following comparison of DDG-1000 and DDG-51 capabilities is based on
information provided by the Navy to CRS at a briefing on June 1, 2005. The
information has been updated in some places to account for changes since 2005.
Growth Margin. The DDG-51 and DDG-1000 designs each have about a 10%
growth margin. For the roughly 9,000-ton DDG-51, this equates to about 900 tons
of growth margin, while for the 14,987-ton DDG-1000, this equates to about 1,400
tons of growth margin.
Ship Mobility. The two designs are roughly equivalent in terms of maximum
sustained speed, cruising endurance, and seakeeping (i.e., stability in rough seas).
The DDG-1000’s draft (28 feet) is somewhat less than the DDG-51’s (31 feet).
Other things held equal, this might give the DDG-1000 an ability to operate in (or be
berthed at) places where the water depth is sufficient for the DDG-1000 but not for
the DDG-51. The DDG-1000’s length (600 feet) is greater than the DDG-51’s (505
feet). Other things held equal, this might give the DDG-51 an ability to be berthed
in spaces that are long enough for the DDG-51 but not for the DDG-1000.
Electrical Power for Weapons and Systems. The DDG-51 has 7.5
megawatts (MW) of electrical power for its weapon systems, while the DDG-1000
design, with its integrated electric-drive system, can provide up to 78 MW for its
weapons and power systems by diverting power from propulsion to weapons and
systems.
Signatures and Detectability. The DDG-1000 has a smaller radar cross-
section and lower infrared, acoustic, and magnetic signatures than the DDG-51. The
two designs are roughly equivalent in terms of the detectability of their radar and
other electromagnetic emissions. The DDG-1000’s reduced signatures, DDG-1000
supporters, will make the DDG-1000 harder to detect, localize, classify, and target,
giving the DDG-1000 a significant advantage in engagements against enemy forces.
Survivability and Damage Control. The Navy states that the DDG-1000
would be able to keep fighting after an attack like the one that disabled the USS Cole
(DDG-67) on October 12, 2000.
The two designs are roughly equivalent in terms of degree of
compartmentalization and ship stability when flooded. The DDG-1000’s vertical
launch system (VLS) is more heavily armored than the DDG-51’s. The DDG’s fire-
suppression system is automated only in the engine room and magazine, while the
DDG-1000’s system is automated throughout the ship, making it safer and more
effective. The DDG-51’s flood-control system is not automated, while the DDG-
1000’s is, which the Navy believes will make it more effective. The DDG-1000’s
electrical power distribution system is an “integrated fight-through” system, meaning
that it is designed to automatically isolate damaged areas and reroute electrical power
around them. All critical DDG-1000 systems are dual-fed, meaning that if power
from one source is cut off, it can be routed through a second source. The DDG-51’s
electrical power distribution system lacks these features.

CRS-65
C4I/Networking Bandwidth. The C4I91 and networking systems on the
DDG-1000 would have five times as much bandwidth as those on the DDG-51. The
C4I/networking capability of the DDG-1000 is equivalent to that on the LHD-8
amphibious assault ship. In addition to improved warfighting capability, this
increased bandwidth would provide sailors aboard the DDG-1000 a better ability to
“reach back” to information sources ashore when conducting at-sea maintenance of
shipboard equipment, potentially increasing the availability rates of shipboard
equipment.
Flag-Level Command Facilities. The DDG-1000 has facilities for
embarking and supporting a flag-level officer and his staff, so that they could use the
ship as platform for commanding a group of ships. The DDG-51 does not have such
facilities.
Anti-Air Warfare/Ballistic Missile Defense (AAW/BMD). The radars on
the two ships are roughly equivalent in terms of dB gain (sensitivity) and target
resolution. 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. The DDG-1000’s AAW
combat system would be able to maintain about 10 times as many tracks as the DDG-
51’s Aegis system. The DDG-1000’s radar has much more capability for resisting
enemy electronic countermeasures and for detecting targets amidst littoral “clutter.”
As a result of the better performance amidst littoral clutter, the Navy believes that
ships escorted by the DDG-1000 in defended littoral waters would have three times
as much survivability as ships escorted by the DDG-51.
The two designs would use the same types of area-defense and point-defense
interceptor missiles.92 They would also use the same flares, chaff, and decoys to
confuse enemy anti-ship cruise missiles, but the Navy believes these devices would
be more effective on the DDG-1000 because of the DDG-1000’s reduced signatures.
Anti-Surface Warfare/Strike Warfare. The DDG-1000 would have
considerably more naval surface fire support (NSFS) capability than the DDG-51.
The DDG-51 has one 5-inch gun, while the DDG-1000 has two 155mm Advanced
Gun Systems (AGSs). The DDG-51’s gun can fire an initial salvo of 20 rounds per
minute and can subsequently fire at a sustained rate of four rounds per minute (20/4).
The DDG-1000’s two guns have a combined firing rate of 20/20. The shells
currently fired by the DDG-51’s gun have a range of 13 nm. Future shells are to have
a range of up to 50 nm. The shells to be fired by the DDG-1000’s guns are to have
a range of 63 to 74 nm, and consequently could cover (at 74 nm) more than three
times as much area ashore (assuming a 25 nm standoff from shore) as a shell with a
range of 50 nm. The shells fired by the DDG-51 carry 8 pounds of explosive, while
those fired by the DDG-1000 are to carry 24 pounds of explosive. When fired at less
91 C4I stands for command and control, communications, computers, and intelligence.
92 As discussed earlier, the Navy, as part of its testimony at the July 31, 2008, hearing before
the Seapower and Expeditionary Forces subcommittee of the House Armed Services
Committee, stated that the DDG-1000 cannot successfully employ the SM-2 or perform
area-defense AAW.

CRS-66
than maximum range, the shells fired by the DDG-1000 can alter their flight paths
so that six to eight of them can hit a target at the same time; the shells to be fired by
the DDG-51 do not have this capability. The DDG-51 carries 600 of the 13nm-range
shells or 230 of 62nm-range shells, while the DDG-1000 carries a total of 600 of its
shells. It might be possible to fit the DDG-51 with one of the 155mm guns to be
carried by the DDG-1000; it would likely require the removal of both the DDG-51’s
5-inch gun and its forward (32-cell) VLS. In this configuration, the DDG-51 might
carry about 120 of the gun’s 155mm shells.
The 155mm guns on the DDG-1000 could be replaced in the future with an
electromagnetic rail gun or directed-energy weapon. The DDG-51 does not have
enough electrical power to support such weapons.
Antisubmarine Warfare (ASW). The DDG-51’s sonar system is more
capable for blue-water ASW operations, while the DDG-1000’s system is more
capable for littoral ASW operations. The DDG-1000’s bow-mounted sonar and
towed array can interact to more rapidly triangulate targets. The Flight IIA DDG-51
lacks a towed array. The DDG-1000’s radar would have more capability than the
DDG-51’s radar for detecting submarine periscopes.
The DDG-51 has six torpedo tubes for firing lightweight (12.75-inch diameter)
anti-submarine torpedoes, while the DDG-1000 has none, but the Navy does not
believe these tubes to be of significant operational value against potential future
threats. Both ships can launch lightweight torpedoes from their helicopters or fire the
Vertical Launch Antisubmarine Rocket (VLA), which is armed with a lightweight
torpedo.
The ships would use the same countermeasures for confusing enemy torpedoes,
but the Navy believes these countermeasures would be more effective on the DDG-
1000 because of the DDG-1000’s reduced signatures.
Mine Warfare (MIW). The DDG-1000’s bow-mounted sonar includes an in-
stride mine-avoidance capability; the DDG-51’s sonar suite has less capability for
detecting mines. The DDG-51 can be built to a design that permits the ship to
embark and operate the Remote Minehunting System (RMS); six ships in the DDG-
51 program (DDGs 91 to 96) have been built to this design. The Navy says that the
DDG-1000’s reduced acoustic and magnetic signatures would translate into a
significantly greater operating area in mined waters.
Missiles for Performing Above Missions. The DDG-51 has 90 missile-
launching tubes in its VLS, while the DDG-1000 has 80. The DDG-51’s VLS tubes
can accommodate a missile up to 21 inches in diameter, 21 feet in length, and about
3,000 pounds in weight. The DDG-1000’s VLS tubes can accommodate a missile
up to 24 inches in diameter, 22 feet in length, and about 4,000 pounds in weight. The
gas-management (i.e., heat-management) system of the DDG-1000’s VLS tubes can
accommodate a hotter-burning missile than the gas-management system of the DDG-
51’s VLS, so the DDG-1000 might be more capable of using future missiles if they
are hotter-burning.

CRS-67
Aviation for Performing Above Missions. The DDG-51 can embark and
operate two SH-60 helicopters but does not have electronics for launching and
recovering unmanned aerial vehicles (UAVs). The DDG-1000 can embark, operate,
and provide full maintenance for two SH-60 helicopters or one SH-60 helicopter and
three UAVs. The DDG-1000’s flight deck is larger than the DDG-51’s and can
accommodate all joint rotary-wing aircraft, including the MV-22, the CH-53, and the
H-47. The DDG-1000’s flight deck is 10 feet higher off the water and can therefore
be used for full flight operations in a sea state (i.e., sea condition) that is at least one
step higher (i.e., rougher) than is possible for the flight deck on the DDG-51.
Special Operations Forces (SOF) Support. The DDG-1000 has
additional berthing for 20 SOF personnel (i.e., a platoon), as well as a space for SOF
mission planning and spaces for stowing SOF gear. The DDG-51 lacks these
features.
Boats. The DDG-51 can embark two seven-meter boats that are deployed and
recovered with a davit. The DDG-1000 can embark two 11-meter boats and four
rubber raiding craft that are deployed and recovered with a stern ramp, which permits
faster and safer launching and recovering, and launch/recovery operations in higher
sea states.
Habitability Features for Crew. On the DDG-51, enlisted crew berthing
spaces accommodate 20 to 60 sailors each. On the DDG-1000, every sailor would
have a stateroom, and each stateroom would accommodate four sailors. The Navy
believes these features would improve crew quality of life, which can improve
retention rates.
April 10, 2008, Navy Briefing to CRS and CBO
At an April 10, 2008, briefing to CRS and CBO, Navy officials presented a
briefing slide providing a comparison of the DDG-1000 design’s capabilities relative
to the DDG-51 design’s capabilities. The briefing slide is reprinted below (with
some editing changes for readability) as Table 7.

CRS-68
Table 7. DDG-1000 Capabilities Relative to DDG-51 Capabilities
Item
DDG-1000 compared to DDG-51
Radar cross section
Significantly smaller
Ship detectability by threat
Threat must fly lower and closer to detect the ship
aircraft
Firm track range on enemy
Significant improvement, especially in land-clutter
anti-ship cruise missiles
environments
Performance against small
Engage small boats at 3 times the effective range and
boat swarm raids
engage 10 times more threats
Safe operating area in areas
Significantly larger
with enemy bottom mines
Land attack capability
3 times as much lethality and 40% greater range than
Extended Range Guided Munition (ERGM)a
Manning
50% less crew
Electrical power
Sufficient capacity for rail gun, laser weapons, and
future radar upgrades
Source: Navy briefing slide #7, entitled “Multi-Mission Combatant,” in Navy briefing to
CRS and CBO, April 10, 2008. CRS has edited the words in the table to make them easier
to understand.
a. ERGM was a 5-inch extended-range guided munition for the 5-inch guns on Navy
cruisers and destroyers. The Navy in 2008 canceled development of ERGM.
In addition to the information presented in Table 7, another slide in the Navy
briefing stated that the DDG-1000’s radar cross section will be similar to that of a
fishing boat.93 Navy officials have also stated separately that the DDG-1000’s
acoustic signature will be similar, at certain speeds, to that of certain U.S. Navy
submarines.94
In elaborating on the point in Table 7 pertaining to the DDG-1000’s electrical
power, Navy officials stated at the briefing that at a speed of 20 knots, the DDG-1000
would have 58 megawatts of power available for powering non-propulsion shipboard
systems. The briefing stated that the DDG-51, by comparison, has 7.5 megawatts of
power available for non-propulsion systems.
May 7, 2008, Navy Letter to Senator Kennedy
A May 7, 2008, letter from Admiral Gary Roughead, the Chief of Naval
Operations (CNO), to Senator Edward Kennedy that was obtained by a defense trade
publication and posted on its website provided information on the comparative costs
and capabilities of the DDG-1000 and DDG-51. The letter stated:
93 Navy briefing slide #8, entitled “Zumwalt Advantage,” in Navy briefing to CRS and
CBO, April 10, 2008.
94 Source: Spoken testimony of Navy officials at hearing before Seapower subcommittee of
Senate Armed Services Committee on April 8, 2008.

CRS-69
Thank you for your letter of April 21, 2008, concerning cost estimates for
the continuation of the DDG 51 program and the DDG 1000 program.
As you indicated in your letter, without firm contracts for future ships of
either class, we are only able to provide a best estimate of the costs we would
incur in either of these programs. Since we are phasing out production of the
DDG 51 class, there would be start-up costs associated with returning this line
to production. As a result, the estimated end cost to competitively procure a lead
DDG-51 (Flight IIa — essentially a repeat of the final ships currently undergoing
construction) in Fiscal Year (FY) 2009 assuming a truncation of the DDG 1000
class after the two lead ships would be either $2.2B for a single ship or $3.5B for
two lead ships (built at competing production yards). This estimate is based on
a Profit Related to Offer (PRO) acquisition strategy. The average cost of
subsequent DDG 51 Flight IIa class ships would be about $1.8B (FY09) per ship
compared to the $2.6B estimated cost of subsequent DDG 1000 class ships.
Below is the breakdown of the one and two ship FY09 DDG 51 estimates,
compared to that of the DDG 1000 in the same year. DDG 1000 costs include
FY08 advanced procurement funds:
(FY$M)
DDG 51
DDG 51
DDG 1000
(FY09)
(FY09)
(FY09)
Qty
1
2
1
Plans/Basic
854.4
1607.8
1393.3
[construc-tion]
Change Orders
39.1
76.1
66.0
Government
1138.2
1556.7
1126.8
Furnished Equip
Other
56.4
57.5
66.6
Total Ship Cost
2088.1
3298.1
2652.6
The table provided below compares the annual operations and support costs
for the DDG 51 and DDG 1000 class ships.
(FY$M)
DDG 1000
DDG 51
Operating
$18.5
$15.7
(steaming)
Maintenance
$10.3
$5.6
Manpower
$8.5
$19.9
Total
$37.3
$41.2
Crew Size
14 officers
24 Officers
106 enlisted
272 Enlisted
The total annual cost for the DDG 51 is a class average based on 17 years
of operations and maintenance, and does not include personnel reduction savings
expected from the DDG Modernization program. While there are cost savings
associated with the DDG 1000’s smaller crew, they are largely offset by higher
estimated maintenance costs for this significantly more complex ship.

CRS-70
Clearly the relative value of the DDG 1000 resides in the combat system
(Dual-Band Radar, Volume Search Radar, ASW Suite, etc) that provide this ship
with superior warfighting capability in the littoral. However, the DDG 51 can
provide Ballistic Missile Defense capability against short and medium range
ballistic missiles and area Anti-Air Warfare capability (required in an anti-access
environment) where the DDG 1000 currently does not. Upgrading the DDG
1000 combat system with this capability would incur additional cost. The DDG
51 class also possesses better capability in active open ocean Anti-Submarine
Warfare than does the DDG 1000.
On balance, the procurement cost of a single DDG 51 is significantly less
than that of a DDG 1000, and the life-cycle costs of the two classes are similar.
I appreciate the opportunity to share my perspective on these two alternatives
with you. A similar letter has been sent to Senator Martinez. As always, if I can
be of further assistance, please let me know.95
On June 3, 2008, John Young, the Under Secretary of Defense for Acquisition,
Technology, and Logistics, in testimony to the Senate Armed Services Committee,
questioned the accuracy of the cost figures in the May 7 letter, stating, among other
things, that he believed the annual operating and support cost of the DDG-1000
would be about $10 million less than that of a DDG-51, and that the procurement
cost figures in the letter relied on certain assumptions that might not prove accurate.
Young’s testimony was viewed as defending the DDG-1000 more strongly than did
the CNO’s May 7, 2008, letter.96
July 2, 2008, DOD letter to Representative Taylor
A July 2, 2008, letter from John Young, the Under Secretary of Defense for
Acquisition, Technology and Logistics (i.e., the DOD acquisition executive), to
Representative Gene Taylor that was obtained by a defense trade publication and
posted on its website provides additional comments regarding the DDG-1000 and
DDG-51, as well as information about the readiness of the DDG-1000 design to enter
production. The letter stated:
I agree that the Navy’s preliminary design analysis for the next generation
cruiser indicates that, for the most capable radar suites under consideration, the
DDG 1000 hull cannot support the radar. This applies just as well to the DDG
51 hull. However, it is my understanding that engineering analysis shows that
the existing DDG 1000 hull design can support significantly more capable radar
suites than the existing DDG 51 hull design. Moreover, while it is not possible
to quickly estimate the production cost of a redesigned DDG 51 alternative, I
suspect that, given the dense and complex nature of the DDG 51 hull, as
95 Source: Letter dated May 7, 2008, from Admiral G. Roughead to the Honorable Edward
M. Kennedy, posted on the Internet at InsideDefense.com (subscription required) on May
30, 2008. Emboldening in the second table as in the original. See also Thomas Duffy,
“Navy Says DDG-100, DDG-51 Annual Operating Costs Are Rated Even,” Inside the Navy,
June 2, 2008.
96 See, for example, Emelie Rutherford, “Young Claims Inaccuracies, Assumptions In Navy
Destroyer Cost Comparison,” Defense Daily, June 5, 2008; and Dale Eisman, “Warning:
Delay On Ship Will Run Up Navy’s Costs,” Norfolk Virginian-Pilot,” June 4, 2008: D1.

CRS-71
compared to that of the DDG 1000 hull, the cost of a redesigned DDG 51 very
likely will be equal to or greater than that of a DDG 1000.
Your letter also warns that cost over-runs for the DDG 1000 program might
cripple the Navy’s shipbuilding programs. I am equally concerned that restarting
the DDG 51 program would pose risk to the shipbuilding budget and inject
additional cost for the following reasons:
— Direct production hours for one DDG 1000 ship are about 2.5 times
that of one DDG 51 restart ship. This validates DOD’s experience that two to
three DDG 51 destroyers need to be purchased annually to sustain the production
workload base for two surface combatant shipyards. That number of DDG 51
ships costs more per year than one DDG 1000 follow ship. The cost per year for
modified DDG 51 ships would be even higher.

— Several ship and vendor base issues,
including
equipment
obsolescence, main reduction gears, configuration change issues, and re-start of
production lines, would need to be resolved in order to award and construct
additional DDG 51 class ships.
— The costs for the two DDG 1000 ships wold increase if that program
is truncated to only two ships.
— There will be program shutdown costs for the DDG 1000 program if
the program is truncated to only two ships.
— The Research, Development, Test, & Evaluation efforts for the DDG
1000 program must continue in order to deliver two complete lead ships and to
support the Dual Band Radar for the CVN 21 program.
In reference to your concern that there is no Joint Requirements Oversight
Council (JROC) or U.S. Marine Corps requirement for fire support that can only
be provided by the DDG 1000, the JROC validated the Operational Requirements
Document (ORD) for the DDG 1000 program. The ORD includes a requirement
to provide precise and sustained naval fires at extended ranges. The DDG 1000
with its advanced Gun System firing the Long Range Land Attack Projectile is
the only ship that can achieve that validated requirement.
I remain convinced that the DDG 1000 program is poised for proper
execution. Unlike DDG 51, LPD 17, and LCS, where the level of concurrent
design, development, and construction were critical flaws, leading to significant
cost increases on the lead ships, the DDG 1000 program benefits from early
technology maturation, and experienced design team using a mature design tool,
proven production processes, and other factors as outlined below:
— Design Drawing Status: DDG 1000 is significantly more mature in
detail design than was LPD 17 or DDG 51 at the same points in the program. For
example, at the time of the Detail Design and Construction (DD&C) contract
award, DDG 1000 detail design products were 55 percent complete, compared
to 0 percent for LPD 17 and DDG 51. At the start of fabrication, DDG 1000
detail design products will be approximately 80-85 percent complete, compared
to 20 percent for DDG 51 and 20-30 percent for the two LCS designs. While
design products for the LPD 17 were also in the 80 percent complete range at the
start of fabrication, this came about only after a long delay to fix and prove the
design tool during the detail design phase, a lesson learned and avoided for the
DDG 1000 program.
— Initial Module Construction: The jointly developed design of DDG
1000 is on schedule to be more mature than any previous shipbuilding program

CRS-72
at start of construction. The design and build of the machinery block in advance
of first ship construction completed in June 2008. This effort has been extremely
beneficial as a risk reduction measure.
— Design Tool Maturity: The DDG 1000 team of contractors worked
together on 3-D modeling during preliminary and system design for 6 years in
advance of the DD&C phase.
— Early Technical Product Definition: Contractor-developed technical
products enabled early development of design products (system diagrams, vendor
statements of work, etc.), which are typically developed during the early stages
of detail design. DDG 1000 leveraged these early developments to help the
program reduce the risk of rework and poor quality than undermine early-start
initiatives such as those experienced on other shipbuilding programs.
— Technology Maturity: The combined DDG 1000 design team learning
and use of the 3-D Product Modeling Tool 6 years in advance of the DD&C
ensures that the right quantity of qualified human capital resources are allocated
in support of the DD&C phase.
— Phase III Cost Performance: Cost performance on DDG 1000 was
within 2.5 percent of budget on the $2.7B development effort on Phase III,
leading to the DD&C phase.
— Current Phase Cost Performance: The current design, development,
and integration contract is performing at an overall cost performance index of
1.02 and a schedule performance index of 0.99 through April 2008. Detail
design and transition to production are on cost and schedule.97
97 Source: Letter dated July 2, 2008, from John J. Young, Jr., to the Honorable Gene Taylor,
posted on the Internet at InsideDefense.com (subscription required) on July 11, 2008. See
also Geoff Fein, “DDG-1000 Hull Can’t Support Most Capable Radar Planned For CG(X),
Pentagon Official Says,” Defense Daily, July 11, 2008.