Navy DDG-51 and DDG-1000 Destroyer
Programs: Background and Issues for
Congress
Ronald O'Rourke
Specialist in Naval Affairs
May 26, 2010
Congressional Research Service
7-5700
www.crs.gov
RL32109
CRS Report for Congress
P
repared for Members and Committees of Congress
Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
Summary
The FY2010 budget that the Navy submitted to Congress last year proposed ending procurement
of Zumwalt (DDG-1000) class destroyers at three ships and resuming procurement of Arleigh
Burke (DDG-51) class Aegis destroyers. Congress, as part of its action on the FY2010 defense
budget, supported this proposal: the FY2010 budget funded the procurement of one DDG-51 (the
first to be procured since FY2005), provided advance procurement funding for two DDG-51s the
Navy wants to procure in FY2011, completed the procurement funding for the third DDG-1000
(which was authorized but only partially funded in FY2009), and provided no funding for
procuring additional DDG-1000s.
The Navy’s FY2011 budget submission calls for procuring two DDG-51s in FY2011 and six
more in FY2012-FY2015. The two DDG-51s that the Navy wants to procure in FY2011 received
$577.2 million in FY2010 advance procurement funding. The Navy’s proposed FY2011 budget
requests another $2,922.2 million in procurement funding for the two ships, so as to complete
their estimated combined procurement cost of $3,499.2 million. The Navy’s proposed FY2011
budget also requests $48.0 million in advance procurement funding for the one DDG-51 that the
Navy wants to procure in FY2012, and $186.3 million in procurement funding for DDG-1000
program-completion costs.
The Navy’s FY2011 budget also proposes terminating the Navy’s planned CG(X) cruiser program
as unaffordable. Rather than starting to procure CG(X)s around FY2017, as the Navy had
previously envisaged, the Navy is proposing to build an improved version of the DDG-51, called
the Flight III version, starting in FY2016. Navy plans thus call for procuring the current version
of the DDG-51, called the Flight IIA version, in FY2010-FY2015, followed by procurement of
Flight III DDG-51s starting in FY2016. Navy plans call for procuring 24 Flight III DDG-51s
between FY2016 and FY2031. Flight III DDG-51s are to carry a smaller version of the new Air
and Missile Defense Radar (AMDR) that was to be carried by the CG(X). The Navy’s proposed
FY2011 budget requests $228.4 million in research and development funding for the AMDR.
Detailed design work on the Flight III DDG-51 reportedly is to begin in FY2012 or FY2013.
FY2011 issues for Congress include the following:
• whether to approve, reject, or modify the Navy’s proposal to develop the Flight
III DDG-51 design and start procuring it in FY2016;
• the potential impact on the DDG-1000 program of DOD’s determination that the
program has experienced a critical cost breach under the Nunn-McCurdy
provision;
• whether to use multiyear procurement (MYP) for Flight IIA DDG-51s that the
Navy wants to procure in FY2011-FY2015; and
• whether to approve, reject, or modify the Navy’s FY2011 funding request for
procurement of Flight IIA DDG-51s, for DDG-1000 program-completion costs,
and for research and development on the AMDR.
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
Contents
Introduction ................................................................................................................................ 1
Background ................................................................................................................................ 2
Navy Destroyer and Cruiser Acquisition Programs ................................................................ 2
DDG-51 Program............................................................................................................ 2
DDG-1000 Program........................................................................................................ 3
CG(X) Program .............................................................................................................. 4
FY2010 Navy Proposal to End DDG-1000 Procurement and Resume DDG-51
Procurement....................................................................................................................... 6
FY2011 Navy Proposal to Terminate CG(X) in Favor of Flight III DDG-51 .......................... 6
Surface Combatant Construction Industrial Base ................................................................. 10
Shipyards...................................................................................................................... 10
Combat System Manufacturers...................................................................................... 10
Supplier Firms .............................................................................................................. 10
FY2011 Funding Request .................................................................................................... 10
Issues for Congress ................................................................................................................... 11
Navy Proposal to Develop and Procure Flight III DDG-51s................................................. 11
Analytical Basis ............................................................................................................ 12
AAW and BMD Capability ........................................................................................... 13
Growth Margin ............................................................................................................. 13
Life-Cycle Ownership Costs ......................................................................................... 14
Alternative of New-Design Destroyer............................................................................ 15
Industrial-Base.............................................................................................................. 16
DDG-1000 Program’s Nunn-McCurdy Cost Breach ............................................................ 17
Multiyear Procurement (MYP) for Flight IIA DDG-51s ...................................................... 19
FY2011 Legislative Activity...................................................................................................... 20
FY2011 Funding Request .................................................................................................... 20
FY2011 Defense Authorization Bill (H.R. 5136) ................................................................. 21
House ........................................................................................................................... 21
Tables
Table 1. Flight III DDG-51 Compared to Potential New-Design Destroyer ................................ 16
Appendixes
Appendix. Additional Background Information on DDG-1000 Program .................................... 23
Contacts
Author Contact Information ...................................................................................................... 27
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
Introduction
The FY2010 budget that the Navy submitted to Congress last year proposed ending procurement
of Zumwalt (DDG-1000) class destroyers at three ships and resuming procurement of Arleigh
Burke (DDG-51) class Aegis destroyers. Congress, as part of its action on the FY2010 defense
budget, supported this proposal: the FY2010 budget funded the procurement of one DDG-51 (the
first to be procured since FY2005), provided advance procurement funding for two DDG-51s the
Navy wants to procure in FY2011, completed the procurement funding for the third DDG-1000
(which was authorized but only partially funded in FY2009), and provided no funding for
procuring additional DDG-1000s.
The Navy’s FY2011 budget submission calls for procuring two DDG-51s in FY2011 and six
more in FY2012-FY2015. The two DDG-51s that the Navy wants to procure in FY2011 received
$577.2 million in FY2010 advance procurement funding. The Navy’s proposed FY2011 budget
requests another $2,922.2 million in procurement funding for the two ships, so as to complete
their estimated combined procurement cost of $3,499.2 million. The Navy’s proposed FY2011
budget also requests $48.0 million in advance procurement funding for the one DDG-51 that the
Navy wants to procure in FY2012, and $186.3 million in procurement funding for DDG-1000
program-completion costs.
The Navy’s FY2011 budget also proposes terminating the Navy’s planned CG(X) cruiser program
as unaffordable. Rather than starting to procure CG(X)s around FY2017, as the Navy had
previously envisaged, the Navy is proposing to build an improved version of the DDG-51, called
the Flight III version, starting in FY2016. Navy plans thus call for procuring the current version
of the DDG-51, called the Flight IIA version, in FY2010-FY2015, followed by procurement of
Flight III DDG-51s starting in FY2016. Navy plans call for procuring 24 Flight III DDG-51s
between FY2016 and FY2031. Flight III DDG-51s are to carry a smaller version of the new Air
and Missile Defense Radar (AMDR) that was to be carried by the CG(X). The Navy’s proposed
FY2011 budget requests $228.4 million in research and development funding for the AMDR.
Detailed design work on the Flight III DDG-51 reportedly is to begin in FY2012 or FY2013.1
FY2011 issues for Congress include the following:
• whether to approve, reject, or modify the Navy’s proposal to develop the Flight
III DDG-51 design and start procuring it in FY2016;
• the potential impact on the DDG-1000 program of DOD’s determination that the
program has experienced a critical cost breach under the Nunn-McCurdy
provision;
• whether to use multiyear procurement (MYP) for Flight IIA DDG-51s that the
Navy wants to procure in FY2011-FY2015; and
• whether to approve, reject, or modify the Navy’s FY2011 funding request for
procurement of Flight IIA DDG-51s, for DDG-1000 program-completion costs,
and for research and development on the AMDR.
1 Zachary M. Peterson, “DDG-51 With Enhanced Radar in FY-16, Design Work To Begin Soon,” Inside the Navy,
February 8, 2010.
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
Congress’s decisions on these issues could affect Navy capabilities and funding requirements, and
the shipbuilding industrial base. The question of whether to develop Flight III DDG-51 or pursue
an alternative path, such as developing a new-design destroyer, could have substantial and long-
lasting effects on the Navy.
Background
Navy Destroyer and Cruiser Acquisition Programs
DDG-51 Program
The DDG-51 program was initiated in the late 1970s.2 The DDG-51 is a multi-mission surface
combatant 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 the Navy’s Ticonderoga (CG-47) class
cruisers, 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
Aegis system has been updated several times over the years. All DDG-51s (and also some CG-
47s) are being modified to receive an additional capability for ballistic missile defense (BMD)
operations.3
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 57 were in service as of the end of FY2009, and the
62nd is scheduled to enter service in late 2011 or early 2012. Of the 62 DDG-51s procured through
FY2005, General Dynamics Bath Iron Works (GD/BIW) of Bath, ME, is the builder of 34, and
the Ingalls shipyard of Pascagoula, MS, which forms part of Northrop Grumman Shipbuilding
(NGSB), is the builder of 28.4 A 63rd DDG-51 was procured in FY2010; the Navy estimates its
cost at $2,234.5 million. The ship is being built at the Ingalls shipyard of NGSB.
The DDG-51 design has been modified over time. The first 28 DDG-51s (i.e., DDGs 51 through
78) are called Flight I/II DDG-51s. Subsequent ships in the class (i.e., DDGs 79 and higher) are
referred to as Flight IIA DDG-51s. The Flight IIA design, first procured in FY1994, implemented
2 The program was initiated 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 Aegis cruisers.
3 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. For more on Navy BMD programs, CRS Report RL33745, Navy Aegis Ballistic Missile
Defense (BMD) Program: Background and Issues for Congress, by Ronald O'Rourke.
4 In the earlier years of the DDG-51 program, when as many as four or five DDG-51s per year were being procured,
Bath Iron Works (BIW) of Bath, ME (now a part of General Dynamics) and Ingalls Shipbuilding of Pascagoula, MS
(now a part of Northrop Grumman Shipbuilding) competed on an annual basis for contracts to build DDG-51s. In
FY1994, when the annual DDG-51 procurement rate dropped to about three ships per year, the Navy ended annual
competition between the firms for the purpose of allocating DDG-51 construction contracts and began to allocate
DDG-51s between them. Two years later, in FY1996, the Navy began using Profit Related to Offer (PRO) bidding,
which granted a higher profit rate to the shipyard that submitted the lower-cost bid for its work. PRO bidding permits
the Navy to employ a degree of competition in the acquisition of DDG-51s even though DDG-51s are allocated rather
than competitively awarded to the two shipyards.
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
a significant design change that included, among other things, the addition of a helicopter hangar.
The Flight IIA design has a full load displacement of about 9,500 tons, which is similar to that of
the CG-47.
DDG-51s were originally built with 35-year expected service lives. The Navy’s report on its
FY2011 30-year (FY2011-FY2040) shipbuilding plan states that the Navy intends to extend the
service lives of Flight IIA DDG-51s to 40 years.5 The Navy is implementing a program for
modernizing all DDG-51s so as maintain their mission and cost effectiveness out to the end of
their projected service lives.6
Older CRS reports provide additional historical and background information on the DDG-51
program.7
DDG-1000 Program
The DDG-1000 program was initiated in the early 1990s.8 The DDG-1000 is a multi-mission
destroyer with an emphasis on naval surface fire support (NSFS) and operations in littoral (i.e.,
near-shore) waters. 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.9 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 CG(X) cruiser.
The DDG-1000 is to have a reduced-size crew of 142 sailors (compared to roughly 300 on the
Navy’s Aegis destroyers and cruisers) so as to reduce its operating and support (O&S) costs. The
ship incorporates a significant number of new technologies, including an integrated electric-drive
propulsion system10 and automation technologies enabling its reduced-sized crew.
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
5 U.S. Navy, Report to Congress on Annual Long-Range Plan for Construction of Naval Vessels for FY 2011, February
2010, p. 21.
6 For more on this program, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer Modernization: Background
and Issues for Congress, by Ronald O’Rourke.
7 See CRS Report 94-343, 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, 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 of
print and available directly from the author]
8 The program was originally designated DD-21, which meant destroyer for the 21st Century. In November 2001, the
program was restructured and renamed DD(X), 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.
9 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.
10 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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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
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 and split-funded (i.e., funded with two-year
incremental funding) in FY2007-FY2008; the Navy estimates their combined procurement cost at
$6,324.6 million. The third DDG-1000 was procured in FY2009 and split-funded in FY2009-
FY2010; the Navy estimates its procurement cost at $2,723.0 million. All three ships are being
built by GD/BIW.
On February 1, 2010, the Navy notified Congress that the DDG-1000 program has experienced a
critical cost breach under the Nunn-McCurdy provision. The Nunn-McCurdy provision (10
U.S.C. 2433a) requires certain actions to be taken if a major defense acquisition program exceeds
(i.e., breaches) certain cost-growth thresholds and is not terminated. A program that experiences a
cost breach large enough to qualify under the provision as a critical cost breach has its previous
acquisition system milestone certification revoked. The Navy stated in its notification letter that
the DDG-1000 program’s critical cost breach is a mathematical consequence of the program’s
truncation to three ships.11 Since the DDG-1000 program has roughly $10 billion in research and
development costs, truncating the program to three ships increased to roughly $3.3 billion the
average amount of research and development costs that are included in the acquisition (i.e.,
research and development plus procurement) cost of each DDG-10000. The resulting increase in
average unit acquisition cost was enough to cause a Nunn-McCurdy cost breach.
For additional background information on the DDG-1000 program, see Appendix.
CG(X) Program
The CG(X) cruiser program was announced by the Navy on November 1, 2001.12 The Navy
wanted to procure as many as 19 CG(X)s as replacements for its 22 CG-47s, which are projected
to reach the end of their 35-year service lives between 2021 and 2029.13 The CG-47s are multi-
11 Source: Letter to congressional offices dated February 1, 2010, from Robert O. Work, Acting Secretary of the Navy,
to Representative Ike Skelton, provided to CRS by Navy Office of Legislative Affairs on February 24, 2010.
12 The Navy on that date announced that that it was launching a Future Surface Combatant Program aimed at acquiring
a family of next-generation surface combatants. This new family of surface combatants, the Navy stated, would include
three new classes of ships:
• a destroyer called the DD(X)—later redesignated DDG-1000—for the precision long-range strike and naval
gunfire mission,
• a cruiser called the CG(X) for the AAW and BMD mission, and
• a smaller combatant called the Littoral Combat Ship (LCS) to counter submarines, small surface attack craft,
and mines in heavily contested littoral (near-shore) areas.
The Future Surface Combatant Program replaced an earlier Navy surface combatant acquisition effort, begun in the
mid-1990s, called the Surface Combatant for the 21st Century (SC-21) program. The SC-21 program encompassed a
planned destroyer called DD-21 and a planned 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, but the start of
development work on the CG-21 was still years in the future. The DD(X) program, now called the DDG-1000 or
Zumwalt-class program, is essentially a restructured continuation of the DD-21 program. The CG(X) might be
considered the successor, in planning terms, of the CG-21. After November 1, 2001, the acronym SC-21 continued for
a time to be used in the Navy’s research and development account to designate a line item (i.e., program element) that
funded development work on the DDG-1000 and CG(X).
13 A total of 27 CG-47s were procured for the Navy between FY1978 and FY1988; the ships entered service between
1983 and 1994. The first five, which were built to an earlier technical standard, were judged by the Navy to be too
(continued...)
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
mission ships with an emphasis on AAW and (for some CG-47s) BMD, and the Navy similarly
wanted the CG(X) to be a multi-mission ship with an emphasis on AAW and BMD. The CG(X)
was to carry the Air and Missile Defense Radar (AMDR), a new radar that was to be considerably
larger and more powerful than the SPY-1 radar carried on the Navy’s Aegis ships.
The Navy assessed CG(X) design options in a study called the CG(X) Analysis of Alternatives
(AOA), known more formally as the Maritime Air and Missile Defense of Joint Forces
(MAMDJF) AOA. The CG(X) AOA was begun in mid-2006 and completed at the end of 2007.
The Navy did not publicly release the results of the CG(X) AOA . Section 1012 of the FY2008
defense authorization act (H.R. 4986/P.L. 110-181 of January 28, 2008) made it U.S. policy to
construct the major combatant ships of the Navy, including ships like the CG(X), with integrated
nuclear power systems, unless the Secretary of Defense submits a notification to Congress that
the inclusion of an integrated nuclear power system is not in the national interest. The Navy
studied nuclear power as a design option for the CG(X), but did not announce whether it would
prefer to procure the CG(X) as a nuclear-powered ship. Some press reports suggested that a
nuclear-powered version of the CG(X) might have had a full load displacement of more than
20,000 tons and a unit procurement cost of $5 billion or more. The issue of nuclear power for
Navy surface ships is discussed in more detail in another CRS report.14
The Navy’s FY2009 budget called for procuring the first CG(X) in FY2011. Beginning in late
2008, however, it was reported that the Navy had decided to defer the procurement of the first
CG(X) by several years, to about FY2017.15 Consistent with these press reports, on April 6, 2009,
Secretary of Defense Robert Gates announced—as part of a series of recommendations for the
then-forthcoming FY2010 defense budget—a recommendation to “delay the CG-X next
generation cruiser program to revisit both the requirements and acquisition strategy” for the
program.16 The Navy’s proposed FY2010 budget deferred procurement of the first CG(X) beyond
FY2015.
(...continued)
expensive to modernize and were removed from service in 2004-2005. The Navy is currently modernizing the
remaining 22 to maintain their mission effectiveness to age 35; for more information, see CRS Report RS22595, Navy
Aegis Cruiser and Destroyer Modernization: Background and Issues for Congress, by Ronald O’Rourke.
14 CRS Report RL33946, Navy Nuclear-Powered Surface Ships: Background, Issues, and Options for Congress, by
Ronald O’Rourke.
15 Zachary M. Peterson, “Navy Awards Technology Company $128 Million Contract For CG(X) Work,” Inside the
Navy, October 27, 2008. Another press report (Katherine McIntire Peters, “Navy’s Top Officer Sees Lessons in
Shipbuilding Program Failures,” GovernmentExecutive.com, September 24, 2008) quoted Admiral Gary Roughead, the
Chief of Naval Operations, as saying: “What we will be able to do is take the technology from the DDG-1000, the
capability and capacity that [will be achieved] as we build more DDG-51s, and [bring those] together around 2017 in a
replacement ship for our cruisers.” (Material in brackets in the press report.) Another press report (Zachary M.
Peterson, “Part One of Overdue CG(X) AOA Sent to OSD, Second Part Coming Soon,” Inside the Navy, September 29,
2008) quoted Vice Admiral Barry McCullough, the Deputy Chief of Naval Operations for Integration of Capabilities
and Resources, as saying that the Navy did not budget for a CG(X) hull in its proposal for the Navy’s budget under the
FY2010-FY2015 Future Years Defense Plan (FYDP) to be submitted to Congress in early 2009.
An earlier report (Christopher P. Cavas, “DDG 1000 Destroyer Program Facing Major Cuts,” DefenseNews.com, July
14, 2008) stated that the CG(X) would be delayed until FY2015 or later. See also Geoff Fein, “Navy Likely To Change
CG(X)’s Procurement Schedule, Official Says,” Defense Daily, June 24, 2008; Rebekah Gordon, “Navy Agrees CG(X)
By FY-11 Won’t Happen But Reveals Little Else,” Inside the Navy, June 30, 2008.
16 Source: Opening remarks of Secretary of Defense Robert Gates at an April 6, 2009, news conference on DOD
recommendations for the then-forthcoming FY2010 defense budget.
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
FY2010 Navy Proposal to End DDG-1000 Procurement and Resume
DDG-51 Procurement
At a July 31, 2008, hearing before the Seapower and Expeditionary Forces subcommittee of the
House Armed Services Committee, the Navy announced that it wanted to end DDG-1000
procurement and resume DDG-51 procurement. The announcement represented a major change
in Navy planning: prior to July 31, 2008, the Navy for years had strongly supported ending DDG-
51 procurement in FY2005 and proceeding with DDG-1000 procurement.
In explaining their proposed change in plans, Navy officials cited a reassessment of threats that
Navy forces are likely to face in coming years. As a result of this reassessment, Navy officials
stated, the service decided that destroyer procurement over the next several years should
emphasize three mission capabilities—area-defense AAW,17 BMD, and open-ocean ASW. Navy
officials also stated that they want to maximize the number of destroyers that can be procured
over the next several years within budget constraints. Navy officials stated that DDG-51s can
provide the area-defense AAW, BMD, and open-ocean ASW capabilities that the Navy wants to
emphasize, and that while the DDG-1000 design could also be configured to provide these
capabilities, the Navy could procure more DDG-51s than reconfigured DDG-1000s over the next
several years for the same total amount of funding. In addition, the Navy by 2008-2009 no longer
appeared committed to the idea of reusing the DDG-1000 hull as the basis for the Navy’s planned
CG(X) cruiser. If the Navy had remained committed to that idea, it might have served as a reason
for continuing DDG-1000 procurement.
The Navy’s FY2010 budget proposed ending DDG-1000 procurement at three ships and resuming
DDG-51 procurement. Congress, as part of its action on the FY2010 defense budget, supported
the proposal: The FY2010 budget funded the procurement of one DDG-51 (the first to be
procured since FY2005), provided advance procurement funding for two DDG-51s the Navy
wants to procure in FY2011, completed the procurement funding for the third DDG-1000 (which
was authorized but only partially funded in FY2009), and provided no funding for procuring
additional DDG-1000s.
FY2011 Navy Proposal to Terminate CG(X) in Favor of Flight III
DDG-51
The Navy’s FY2011 budget, submitted to Congress on February 1, 2010, proposes another major
change in Navy plans—terminating the Navy’s planned CG(X) cruiser program and instead
procuring an improved version of the DDG-51 called the Flight III version.18 The Navy states that
17 A ship with a point-defense AAW system can defend itself. A ship with an area-defense AAW system can defend
both itself and other ships in the area. An area-defense AAW system employs an interceptor missile with a range
sufficient to hit a crossing target (i.e., a target that is heading toward another ship). Navy ships equipped with the SM-2
missile can conduct area-defense AAW operations.
18 It is a source of potential confusion that this is not the first time that the Navy has used the Flight III designation: The
Navy in 1988 studied design options for a Flight III version of the DDG-51 design. The Chief of Naval Operations
gave initial approval to a Flight III design concept, 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 began procurement in FY1994. The Flight III DDG-51 that the Navy now wants to begin
(continued...)
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Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress
its desire to terminate the CG(X) program is “driven by affordability considerations.”19 Rather
than starting to procure CG(X)s around FY2017, as the Navy had previously envisaged, the Navy
wants to begin procuring Flight III DDG-51s in FY2016. Navy plans thus call for procuring the
Flight IIA DDG-51s in FY2010-FY2015, followed by procurement of Flight III DDG-51s starting
in FY2016.20 Navy plans call for procuring 24 Flight III DDG-51s between FY2016 and
FY2031.21
The Flight III DDG-51 is to carry a version of the AMDR that is smaller and less powerful than
the one envisaged for the CG(X). The Flight III DDG-51’s AMDR is to have a diameter of about
14 feet, while the AMDR intended for the CG(X) might have had a diameter of about 22 feet.22 In
addition to improving the DDG-51’s AAW and BMD capability through the installation of the
AMDR, the Navy is also studying options for modifying the DDG-51 design in other ways for
purposes of reducing crew size, achieving energy efficiency and improved power generation,
improving effectiveness in warfare areas other than AAW and BMD, and reducing total
ownership cost.23 Detailed design work on the Flight III DDG-51 will reportedly begin in FY2012
or FY2013.24
The Navy’s desire to cancel the CG(X) and instead procure Flight III DDG-51s apparently took
shape during 2009: at a June 16, 2009, hearing before the Seapower subcommittee of the Senate
Armed Services Committee, the Navy testified that it was conducting a study on destroyer
procurement options for FY2012 and beyond that was examining design options based on either
the DDG-51 or DDG-1000 hull form.25 A January 2009 memorandum from the Department of
Defense acquisition executive had called for such a study.26 In September and November 2009, it
(...continued)
procuring in FY2016 is not the same as the Flight III design of 1988-1991.
19 Department of the Navy, Office of Budget, Highlights of the Department of the Navy FY 2011 Budget, February
2010, p. 5-7.
20 See, for example, Zachary M. Peterson, “Navy To Launch Technical Study And Cost Analysis For New DDG-51s,”
Inside the Navy, February 19, 2010.
21 Source: Supplementary data on 30-year shipbuilding plan provided to CRS and the Congressional Budget Office
(CBO) by the Navy on February 18, 2010.
22 Sources for 14-foot and 22-foot figures: Zachary M. Peterson, “DDG-51 With Enhanced Radar in FY-16, Design
Work To Begin Soon,” Inside the Navy, February 8, 2010; Amy Butler, “STSS Prompts Shift in CG(X) Plans,”
Aerospace Daily & Defense Report, December 11, 2010: 1-2; “[Interview With] Vice Adm. Barry McCullough,”
Defense News, November 9, 2009: 38.
23 Source: Memorandum dated February 2, 2010, from Director, Surface Warfare Division (N86) to Commander, Naval
Sea Systems Command (SEA 05) on the subject “Technical Study In Support Of DDG 51 Class Resource Planning
And Requirements Analysis,” posted on InsideDefense.com (subscription required) February 19, 2009. See also
Zachary M. Peterson, “Navy To Launch Technical Study And Cost Analysis For New DDG-51s,” Inside the Navy,
February 19, 2010.)
24 Zachary M. Peterson, “DDG-51 With Enhanced Radar in FY-16, Design Work To Begin Soon,” Inside the Navy,
February 8, 2010.
25 Source: Transcript of spoken remarks of Vice Admiral Bernard McCullough at a June 16, 2009, hearing on Navy
force structure shipbuilding before the Seapower subcommittee of the Senate Armed Services Committee.
26 A January 26, 2009, memorandum for the record from John Young, the then-DOD acquisition executive, stated that
“The Navy proposed and OSD [the Office of the Secretary of Defense] agreed with modification to truncate the DDG-
1000 Program to three ships in the FY 2010 budget submission.” The memo proposed procuring one DDG-51 in
FY2010 and two more FY2011, followed by the procurement in FY2012-FY2015 (in annual quantities of 1, 2, 1, 2) of
a ship called the Future Surface Combatant (FSC) that could be based on either the DDG-51 design or the DDG-1000
design. The memorandum stated that the FSC might be equipped with a new type of radar, but the memorandum did
not otherwise specify the FSC’s capabilities. The memorandum stated that further analysis would support a decision on
(continued...)
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was reported that the Navy’s study was examining how future requirements for AAW and BMD
operations might be met by a DDG-51 or DDG-1000 hull equipped with a new radar.27 On
December 7, 2009, it was reported that the Navy wanted to cancel its planned CG(X) cruiser and
instead procure an improved version of the DDG-51.28 In addition to being concerned about the
projected high cost and immature technologies of the CG(X),29 the Navy reportedly had
concluded that it does not need a surface combatant with a version of the AMDR as large and
capable as the one envisaged for the CG(X) to adequately perform projected AAW and BMD
missions, because the Navy will be able to augment data collected by surface combatant radars
with data collected by space-based sensors. The Navy reportedly concluded that using data
collected by other sensors would permit projected AAW and BMD missions to be performed
adequately with a radar smaller enough to be fitted onto the DDG-51.30 Reports suggested that the
new smaller radar would be a scaled-down version of the AMDR originally intended for the
CG(X).31
The Navy’s report on its FY2011 30-year (FY2011-FY2040) shipbuilding plan, submitted to
Congress in conjunction with the FY2011 budget, states that the 30-year plan:
Solidifies the DoN’s [Department of the Navy’s] long-term plans for Large Surface
Combatants by truncating the DDG 1000 program, restarting the DDG 51 production line,
and continuing the Advanced Missile Defense Radar (AMDR) development efforts. Over the
past year, the Navy has conducted a study that concludes a DDG 51 hull form with an
AMDR suite is the most cost-effective solution to fleet air and missile defense requirements
over the near to mid-term....
The Navy, in consultation with OSD, conducted a Radar/Hull Study for future destroyers.
The objective of the study was to provide a recommendation for the total ship system
solution required to provide Integrated Air and Missile Defense (IAMD) (simultaneous
ballistic missile and anti-air warfare (AAW) defense) capability while balancing affordability
with capacity. As a result of the study, the Navy is proceeding with the Air and Missile
Defense Radar (AMDR) program....
As discussed above, the DDG 51 production line has been restarted. While all of these new-
start guided missile destroyers will be delivered with some BMD capability, those procured
in FY 2016 and beyond will be purpose-built with BMD as a primary mission. While there is
work to be done in determining its final design, it is envisioned that this DDG 51 class
variant will have upgrades to radar and computing performance with the appropriate power
(...continued)
whether to base the FSC on the DDG-51 design or the DDG-1000 design. (Memorandum for the record dated January
26, 2009, from John Young, Under Secretary of Defense [Acquisition, Technology and Logistics], entitled “DDG 1000
Program Way Ahead,” posted on InsideDefense.com [subscription required].)
27 Zachary M. Peterson, “Navy Slated To Wrap Up Future Destroyer Hull And Radar Study,” Inside the Navy,
September 7, 2009. Christopher P. Cavas, “Next-Generation U.S. Warship Could Be Taking Shape,” Defense News,
November 2, 2009: 18, 20.
28 Christopher J. Castelli, “Draft Shipbuilding Report Reveals Navy Is Killing CG(X) Cruiser Program,” Inside the
Navy, December 7, 2009.
29 Christopher J. Castelli, “Draft Shipbuilding Report Reveals Navy Is Killing CG(X) Cruiser Program,” Inside the
Navy, December 7, 2009.
30 Amy Butler, “STSS Prompts Shift in CG(X) Plans,” Aerospace Daily & Defense Report, December 11, 2009: 1-2.
31 Cid Standifer, “NAVSEA Plans To Solicit Contracts For Air And Missile Defense Radar,” Inside the Navy,
December 28, 2009; “Navy Issues RFP For Phase II of Air And Missile Defense Radar Effort,” Defense Daily,
December 24, 2009: 4.
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generation capacity and cooling required by these enhancements. These upgraded DDG 51
class ships will be modifications of the current guided missile destroyer design that combine
the best emerging technologies aimed at further increasing capabilities in the IAMD arena
and providing a more effective bridge between today’s capability and that originally planned
for the CG(X). The ships reflected in this program have been priced based on continuation of
the existing DDG 51 re-start program. Having recently completed the Hull and Radar Study,
the Department is embarking on the requirements definition process for these AMDR
destroyers and will adjust the pricing for these ships in future reports should that prove
necessary.32
In testimony to the House and Senate Armed Services Committees on February 24 and 25, 2010,
respectively, Admiral Gary Roughead, the Chief of Naval Operations, stated:
Integrated Air and Missile Defense (IAMD) incorporates all aspects of air defense against
ballistic, anti-ship, and overland cruise missiles. IAMD is vital to the protection of our force,
and it is an integral part of our core capability to deter aggression through conventional
means....
To address the rapid proliferation of ballistic and anti-ship missiles and deep-water
submarine threats, as well as increase the capacity of our multipurpose surface ships, we
restarted production of our DDG 51 Arleigh Burke Class destroyers (Flight IIA series).
These ships will be the first constructed with IAMD, providing much-needed Ballistic
Missile Defense (BMD) capacity to the Fleet, and they will incorporate the hull, mechanical,
and electrical alterations associated with our mature DDG modernization program. We will
spiral DDG 51 production to incorporate future integrated air and missile defense
capabilities....
The Navy, in consultation with the Office of the Secretary of Defense, conducted a
Radar/Hull Study for future surface combatants that analyzed the total ship system solution
necessary to meet our IAMD requirements while balancing affordability and capacity in our
surface Fleet. The study concluded that Navy should integrate the Air and Missile Defense
Radar program S Band radar (AMDR-S), SPY-3 (X Band radar), and Aegis Advanced
Capability Build (ACB) combat system into a DDG 51 hull. While our Radar/Hull Study
indicated that both DDG 51 and DDG 1000 were able to support our preferred radar systems,
leveraging the DDG 51 hull was the most affordable option. Accordingly, our FY 2011
budget cancels the next generation cruiser program due to projected high cost and risk in
technology and design of this ship. I request your support as we invest in spiraling the
capabilities of our DDG 51 Class from our Flight IIA Arleigh Burke ships to Flight III ships,
which will be our future IAMD-capable surface combatant. We will procure the first Flight
III ship in FY 2016.33
32 U.S. Navy, Report to Congress on Annual Long-Range Plan for Construction of Naval Vessels for FY 2011,
February 2010, pp. 12, 13, 19. The first reprinted paragraph, taken from page 12, also occurs on page 3 as part of the
executive summary.
33 Statement of Admiral Gary Roughead, Chief of Naval Operations, before the House Armed Services Committee on
24 February, 2010, pp. 10-11; and Statement of Admiral Gary Roughead, Chief of Naval Operations, before the Senate
Armed Services Committee on 25 February, 2010, pp. 10-11.
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Surface Combatant Construction Industrial Base
Shipyards
All cruisers, destroyers, and frigates procured since FY1985 have been built at GD/BIW of Bath,
ME, and the Ingalls shipyard in Pascagoula, MS, that forms part of NGSB.34 Both yards have
long histories of building larger surface combatants. Construction of Navy surface combatants in
recent years has accounted for virtually all of GD/BIW’s ship-construction work and for a
significant share of Ingalls’ ship-construction work. (The Ingalls shipyard also builds amphibious
ships for the Navy.) Navy surface combatants are overhauled, repaired, and modernized at
GD/BIW, NGSB, other private-sector U.S. shipyards, and government-operated naval shipyards
(NSYs).
Combat System Manufacturers
Lockheed Martin and Raytheon are generally considered the two leading Navy surface combatant
radar makers and combat system integrators. Northrop Grumman is a third potential maker of
Navy surface combatant radars. Lockheed is the lead contractor for the DDG-51 combat system
(the Aegis system), while Raytheon is the lead contractor for the DDG-1000 combat system, the
core of which is called the Total Ship Computing Environment Infrastructure (TSCE-I). Lockheed
has a share of the DDG-100 combat system, and Raytheon has a share of the DDG-51 combat
system. Lockheed, Raytheon, and Northrop are potential makers of the AMDR to be carried by
the Flight III DDG-51.
Supplier Firms
The surface combatant industrial base also includes hundreds of additional firms that supply
materials and components. 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.
FY2011 Funding Request
The two DDG-51s that the Navy wants to procure in FY2011 received $577.2 million in FY2010
advance procurement funding. The Navy’s proposed FY2011 budget requests another $2,922.2
million in procurement funding for the two ships, so as to complete their estimated combined
procurement cost of $3,499.2 million. The Navy’s proposed FY2011 budget also requests $48.0
million in advance procurement funding for the one DDG-51 that the Navy wants to procure in
FY2012, $186.3 million in procurement funding for DDG-1000 program-completion costs, and
$228.4 million in research and development funding for the AMDR. The funding request for the
AMDR is contained in the Navy’s research and development account in Project 3186 (“Air and
Missile Defense Radar”) of Program Element (PE) 0604501N (“Advanced Above Water
Sensors”).
34 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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Issues for Congress
FY2011 issues for Congress include the following:
• whether to approve, reject, or modify the Navy’s proposal to develop the Flight
III DDG-51 design and start procuring it in FY2016;
• the potential impact on the DDG-1000 program of DOD’s determination that the
program has experienced a critical cost breach under the Nunn-McCurdy
provision;
• whether to use multiyear procurement (MYP) for Flight IIA DDG-51s that the
Navy wants to procure in FY2011-FY2015; and
• whether to approve, reject, or modify the Navy’s FY2011 funding request for
procurement of Flight IIA DDG-51s, for DDG-1000 program-completion costs,
and for research and development on the AMDR.
The first three of these issues are discussed below.
Navy Proposal to Develop and Procure Flight III DDG-51s
Although the first Flight III DDG-51 would not be procured under Navy plans until FY2016,
Navy activities starting in FY2011 will increasingly commit the Navy to this path. An alternative
to the Flight III DDG-51 that Congress may wish to consider would be a new-design destroyer
that would be more capable in certain respects than the Flight III DDG-51, but more affordable
than the CG(X). If development of a new-design destroyer were begun in FY2011, the first ship
might be ready for procurement as early as FY2017.
In considering whether to approve, reject, or modify the Navy’s proposal to develop and procure
Flight III DDG-51s, potential questions for Congress to consider include the following:
• Is there an adequate analytical basis for procuring Flight III DDG-51s in lieu of
CG(X)s? Should an analysis of alternatives (AOA) or the equivalent of an AOA
be performed before committing to the development and procurement of Flight
III DDG-51s?
• Would a Flight III DDG-51 have sufficient AAW and BMD capability to perform
projected AAW and BMD missions?
• Would a Flight III DDG-51 have sufficient growth margin for a projected 35- or
40-year service life?
• Would a Flight III DDG-51 have sufficiently low life-cycle ownership costs?
• How would a new-design destroyer compare to a Flight III DDG-51 in terms of
capabilities, costs, and risks?
• What would be the potential industrial-base consequences of developing and
procuring a new-design destroyer instead of the Flight III DDG-51?
Each of these questions is discussed below.
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Analytical Basis
Is there an adequate analytical basis for procuring Flight III DDG-51s in lieu of CG(X)s? Should
an analysis of alternatives (AOA) or the equivalent of an AOA be performed before committing to
the development and procurement of Flight III DDG-51s?35
Those who believe there is an adequate analytical basis for canceling the CG(X) and instead
procuring Flight III DDG-51s could argue the following:
• Shifting to procurement of Flight III DDG-51s in FY2016, like shifting to
procurement of Flight IIA DDG-51s in FY1994, would simply extend the DDG-
51 production effort, and therefore would not amount to the initiation of a new
shipbuilding program that would require an AOA or the equivalent of an AOA.
• The Navy’s proposal to cancel the CG(X) and instead procure Flight III DDG-
51s reflects substantial analytical work in the form of the CG(X) AOA, additional
Navy studies that were done to support the 2008-2009 proposal to end DDG-
1000 procurement and restart DDG-51 procurement, and the 2009 Navy
destroyer hull/radar study that examined options for improving the AAW and
BMD capabilities of the DDG-51 and DDG-1000 destroyer designs through the
installation of an improved radar and combat system modifications.
Those who question whether there is an adequate analytical basis for canceling the CG(X) and
instead procuring Flight III DDG-51s could argue the following:
• Procuring Flight III DDG-51s starting in FY2016 represents a significant change
from the previous plan to procure CG(X)s starting around FY2017. Given the
scope of the design modifications incorporated into the Flight III DDG-51 and
the number of years that the design would be procured, the Navy’s plan amounts
to the equivalent of a new shipbuilding program whose initiation would require
an AOA or the equivalent of an AOA.
• The CG(X) AOA focused mainly on examining radar and hull-design options for
a cruiser with a large and powerful version of the AMDR, rather than radar- and
35 The issue of whether there is an adequate analytical basis for canceling the CG(X) and instead procuring Flight III
DDG-51s is somewhat similar to an issue raised by CRS several years ago as to whether there was an adequate
analytical basis for the Navy’s decision that a ship like the LCS—a small, fast ship with modular payload packages—
would be the best or most cost-effective way to fill gaps the Navy had identified in its capabilities for countering
submarines, small surface attack craft, and mines in heavily contested littoral areas. (See, for example, the September 5,
2002, update of CRS Report RS21305, Navy Littoral Combat Ship (LCS): Background and Issues for Congress, by
Ronald O’Rourke, or the October 28, 2004, and the October 28, 2004, update of CRS Report RL32109, Navy DDG-51
and DDG-1000 Destroyer Programs: Background and Issues for Congress, by Ronald O'Rourke.)
The Navy eventually acknowledged that, on the question of what would be the best approach to fill these capability
gaps, “the more rigorous analysis occurred after the decision to move to LCS.” (Spoken testimony of Vice Admiral
John Nathman, Deputy Chief of Naval Operations (Warfare Requirements and Programs), at an April 3, 2003 hearing
on Navy programs before the Projection Forces subcommittee of the House Armed Services Committee. At this
hearing, the chairman of the subcommittee, Representative Roscoe Bartlett, asked the Navy witnesses about the Navy’s
analytical basis for the LCS program. The witnesses defended the analytical basis of the LCS program but
acknowledged that “The more rigorous analysis occurred after the decision to move to LCS.” (See U.S. Congress,
House Committee on Armed Services, Subcommittee on Projection Forces, Hearing on National Defense
Authorization Act for Fiscal Year 2004—H.R. 1588, and Oversight of Previously Authorized Programs. 108th Cong., 1st
sess., Mar. 27, and Apr. 3, 2003, (Washington: GPO, 2003), p. 126. For an article discussing the exchange, see Jason
Ma, “Admiral: Most LCS Requirement Analysis Done After Decision To Build,” Inside the Navy, Apr. 14, 2003.)
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hull-design options for a smaller destroyer with a smaller and less powerful
version of the AMDR. The Navy’s 2009 destroyer hull/radar study was focused
on answering a somewhat narrowly defined question: what would be the lowest-
cost option for improving the AAW and BMD performance of a DDG-51 or
DDG-1000 by a certain amount through the installation of an improved radar and
an associated modified combat system? An adequate analytical basis for a
proposed program change of this magnitude would require an AOA or equivalent
study that rigorously examined a broader question: given projected Navy roles
and missions, and projected Navy and DOD capabilities to be provided by other
programs, what characteristics of all kinds (not just AAW and BMD capability)
are needed in surface combatants in coming years, and what is the most cost-
effective acquisition strategy to provide such ships?
AAW and BMD Capability
Would a Flight III DDG-51 have sufficient AAW and BMD capability to perform projected AAW
and BMD missions?
The Flight III DDG-51 would have more AAW and BMD capability than the current DDG-51
design, but less AAW and BMD capability than was envisioned for the CG(X), in large part
because the Flight III DDG-51 would be equipped with a roughly 14-foot-diameter version of the
AMDR that would have more sensitivity than the SPY-1 radar on Flight IIA DDG-51s, but less
sensitivity than the roughly 22-foot-diameter version of the AMDR that was envisioned for the
CG(X). The CG(X) also may have had more missile-launch tubes than the Flight III DDG-51.
Supporters of the Navy’s proposal to procure Flight III DDG-51s could argue that a roughly 14-
foot-diameter version of the AMDR would provide the DDG-51 with sufficient AAW and BMD
capability to perform projected AAW and BMD missions because this radar would be
substantially more capable than the SPY-1 radar currently on DDG-51s, and because Flight III
DDG-51s (and other Navy ships) would also benefit from data collected by other sensors,
including space-based sensors.
Skeptics could argue that Flight III DDG-51s might not have sufficient AAW and BMD capability
because a roughly 14-foot-diameter AMDR would be substantially less capable than the roughly
22-foot-diameter AMDR that the Navy previously believed would be needed to adequately
perform projected AAW and BMD missions, and because the off-board sensors and data-
communications links on which the Flight III DDG-51 would rely for part of its sensor data that
could be vulnerable to enemy attack.
Growth Margin
Would a Flight III DDG-51 have sufficient growth margin for a projected 35- or 40-year service
life?
A ship’s growth margin refers to its capacity for being fitted over time with either additional
equipment or newer equipment that is larger, heavier, or more power-intensive than the older
equipment it is replacing, so as to preserve the ship’s mission effectiveness. Elements of a ship’s
growth margin include interior space, weight-carrying capacity, electrical power, cooling capacity
(to cool equipment), and ability to accept increases in the ship’s vertical center of gravity. Navy
ship classes are typically designed so that the first ships in the class will be built with a certain
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amount of growth margin. Over time, some or all of the growth margin in a ship class may be
used up by backfitting additional or newer systems onto existing ships in the class, or by building
later ships in the class to a modified design that includes additional or newer systems.
Modifying the DDG-51 design over time has used up some of the design’s growth margin. The
Flight III DDG-51 would have less of a growth margin than what the Navy would aim to include
in a new destroyer design of about the same size.
Supporters of the Navy’s proposal to procure Flight III DDG-51s could argue that the ship’s
growth margin would be adequate because the increase in capability achieved with the Flight III
configuration reduces the likelihood that the ship will need much subsequent modification to
retain its mission effectiveness over its projected service life. They could also that, given
technology advances, new systems added to the ship years from now might require no more (and
possibly less) space, weight, electrical power, or cooling capacity than the older systems they
replace.
Skeptics could argue that there are uncertainties involved in projecting what types of capabilities
ships might need to have to remain mission effective over a 35- or 40-year life, and that building
expensive new warships with relatively modest growth margins consequently would be
imprudent. The Flight III DDG-51’s growth margin, they could argue, could make it more likely
that the ships would need to be removed from service well before the end of their projected
service lives due to an inability to accept modifications needed to preserve their mission
effectiveness. Skeptics could argue that it might not be possible to fit the Flight III DDG-51 in the
future with a high-power directed-energy weapon (DEW), such as a laser, because the ship would
lack the electrical power required for such a weapon. Skeptics could argue that DEWs could be
critical to the Navy’s ability years from now to affordably counter large numbers of enemy anti-
ship cruise missiles (ASCMs) and anti-ship ballistic missiles (ASBMs) that might be fielded by a
wealthy and determined adversary,36 and that procuring Flight III DDG-51s could delay the point
at which lasers could be introduced into the cruiser-destroyer force, and reduce for many years
the portion of the cruiser-destroyer force that could ultimately be backfitted with lasers. This,
skeptics could argue, might result in an approach to AAW and BMD on cruisers and destroyers
that might ultimately be unaffordable for the Navy to sustain in a competition against a wealthy
and determined adversary.
Life-Cycle Ownership Costs
Would a Flight III DDG-51 have sufficiently low life-cycle ownership costs?
Supporters of the Navy’s proposal to procure Flight III DDG-51s could argue that the annual
operating & support (O&S) cost of the Flight IIA DDG-51 design is not onerous, and that the
annual O&S cost of a Flight III DDG-51 would not be markedly different. They could also argue
that the Navy is studying options for modifying the DDG-51 design to reduce crew size and
36 The cost for an adversary to build and field an additional land-based ASCM or ASBM might be much less than the
cost for the Navy to build and field an additional sea-based missile-launch tube and procure an additional interceptor
missile to place in that tube. If so, then it might become unaffordable for the Navy at some point in the future to match
each additional ASCM and ASBM that a wealthy and determined adversary might field with an additional launch tube
and interceptor missile. DEWs, if successfully developed, promise to reverse this unfavorable cost equation by
lowering the marginal cost per shot for intercepting ASCMs and ASBMs to a level well below what it costs an enemy
to build an additional ASCM or ASBM.
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otherwise reduce total ownership cost.37 Skeptics could argue that the crew size and other
elements of the Flight III DDG-51’s life-cycle ownership cost could be reduced only so much,
given certain unchangeable features of the basic DDG-51 design, and that building significant
numbers of Flight III DDG-51s—rather than ships designed from scratch to achieve significant
reductions in crew size and other life-cycle ownership costs—would produce a surface combatant
fleet with relatively high life-cycle ownership costs.
Alternative of New-Design Destroyer
How would a new-design destroyer compare to a Flight III DDG-51 in terms of capabilities,
costs, and risks?
As an alternative to the Flight III DDG-51, a new-design destroyer could be designed with the
following characteristics:
• a version of the AMDR that is larger than the roughly 14-foot-diameter version
envisioned for the Flight III DDG-51, but smaller than the roughly 22-foot-
diameter version that was envisioned for the CG(X);
• enough electrical power to permit the ship to be backfitted in the future with a
high-power DEW, such as a laser, for AAW and/or BMD operations;
• more growth margin than on the Flight III DDG-51;
• producibility features for reducing construction cost per ton that are more
extensive than those on the DDG-51 design;
• automation features permitting a crew that is smaller than what can be achieved
on a Flight III DDG-51, so as to reduce crew-related life-cycle ownership costs;
• physical open-architecture features that are more extensive than those on the
Flight III DDG-51, so as to reduce modernization-related life-cycle ownership
costs;
• no technologies not already on, or being developed for, other Navy ships, with
the possible exception of technologies that would enable an integrated electric
drive system that is more compact than the one used on the DDG-1000; and
• DDG-51-like characteristics in other areas, such as survivability, maximum
speed, cruising range, and weapons payload.
Such a ship might have a full load displacement of roughly 11,000 to 12,000 tons, compared to
about 10,000 tons for the Flight III DDG-51, about 15,000 tons for an AAW/BMD version of the
DDG-1000, and perhaps 15,000 to 23,000 tons for a CG(X).
The cost and technical risk of developing the new destroyer’s hull design could be minimized by
leveraging, where possible, existing surface combatant hull designs. The cost and technical risk of
37 Source: Memorandum dated February 2, 2010, from Director, Surface Warfare Division (N86) to Commander, Naval
Sea Systems Command (SEA 05) on the subject “Technical Study In Support Of DDG 51 Class Resource Planning
And Requirements Analysis,” posted on InsideDefense.com (subscription required) February 19, 2009. See also
Zachary M. Peterson, “Navy To Launch Technical Study And Cost Analysis For New DDG-51s,” Inside the Navy,
February 19, 2010.)
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developing its combat system could be minimized by using a modified version of the DDG-51 or
DDG-1000 combat system. Other development costs and risks for the new destroyer would be
minimized by using no technologies not already on, or being developed for, other Navy ships
(with the possible exception of some integrated electric drive technologies). Even with such steps,
however, the cost and technical risk of developing the new destroyer would be greater than those
of the Flight III DDG-51. The development cost of the new destroyer would likely be equivalent
to the procurement cost of at least one destroyer, and possibly two destroyers.
The procurement cost of the new destroyer would be minimized by incorporating producibility
features for reducing construction cost per ton that are more extensive than those on the Flight III
DDG-51. Even with such features, the new destroyer would be more expensive to procure than
the Flight III DDG-51, in part because the Flight III DDG-51 would leverage many years of prior
production of DDG-51s. In addition, the new destroyer, as a new ship design, would pose more
risk of procurement cost growth than would the Flight III DDG-51. The procurement cost of the
new destroyer would nevertheless be much less than that of the CG(X), and might, after the
production of the first few units, be fairly close to that of the Flight III DDG-51.
Although the new destroyer would use a reduced-size crew and physical open architecture
features to reduce life-cycle ownership costs, it is unclear how the life-cycle ownership costs of
the new destroyer would compare with those of the Flight III DDG-51.
Table 1 summarizes potential relative merits of the Flight III DDG-51 and the potential new
destroyer considered here. The Flight III DDG-51 offers near-term benefits of lower development
cost and risk and lower procurement cost and risk, while the new destroyer would offer longer-
term benefits of greater AAW and BMD capability and greater growth margin.
Table 1. Flight III DDG-51 Compared to Potential New-Design Destroyer
(X indicates the design that would likely have greater capability or growth margin, or lower cost or risk)
Flight III DDG-51
New-design destroyer
Capability of AMDR for
X
AAW/BMD operations
Electrical power to support future
X
high-power DEW for AAW/BMD
operations
Growth margin
X
Development cost
X
Development risk
X
Procurement cost
X
Procurement cost growth risk
X
Life-cycle ownership cost
unclear which design would have lower cost
Source: Prepared by CRS.
Industrial-Base
What would be the potential industrial-base consequences of developing and procuring a new-
design destroyer instead of the Flight III DDG-51?
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Developing and procuring a new-design destroyer would provide an opportunity for the Navy to
conduct a competition between Lockheed and Raytheon (and perhaps other firms) to be the lead
contractor on the ship’s combat system. Procuring Flight III DDG-51s would mean that Lockheed
would likely continue its current status as the lead contractor of Navy cruiser and destroyer
combat systems. Developing and procuring either ship would provide the Navy with an
opportunity to conduct a competition between Lockheed, Raytheon, and Northrop to build the
AMDR. The supplier firms for a new-design destroyer could be different in some cases from the
supplier firms for a Flight III DDG-51.
DDG-1000 Program’s Nunn-McCurdy Cost Breach
Regarding the potential impact on the DDG-1000 program of DOD’s determination that the
program has experienced a critical cost breach under the Nunn-McCurdy provision, a March 1,
2010, article stated that:
the [DDG-1000] destroyers will receive a new round of congressional scrutiny due to the
Nunn-McCurdy breach. Last year’s changes [to the Nunn-McCurdy provision] mean that not
only is the “presumption” in favor of ending such programs [i.e., programs that experience a
critical cost breach], but those that are not terminated must go through a new process to
approve their continued development. The Defense secretary must also certify that the
program satisfies several key criteria, including that no acceptable alternative exists.
Gates has testified that the DDG-1000 reviews would be, in effect, formalities. “Our plan is
to continue to go forward with it,” he told the House Armed Services Committee….
The Nunn-McCurdy law, however, makes no exceptions for programs whose costs have
increased due to quantity changes. Some congressional aides are not pleased that Pentagon
officials appear to presume that the Zumwalt program will pass its review and continue
unabated—particularly because the new law is intended to create the opposite presumption.
Staffers are also curious how Navy and Pentagon officials will certify that no alternatives are
available when they have said for a year and a half that the Arleigh Burkes are preferable to
the Zumwalts.
If the DDG-1000’s cost breach is a test for how the Pentagon acts under the new law [i.e.,
the Nunn-McCurdy provision as amended in 2009], it is also something of a test for
Congress’ ability to rein in costly weapons. Certain lawmakers may try to use the Zumwalt’s
cost woes to terminate one or two of the ships in order to siphon off a few billion dollars to
pay for initiatives that are of interest to them.
But such efforts are unlikely to succeed, analysts say. Funding for the three ships has already
been appropriated. The first ship is about 20 percent built, Roughead said, while construction
of the second has just begun, and the third is not yet under contract. Scrapping the
construction of any of these destroyers would require rescinding money already appropriated
and a reversal of a policy decision—a stretch for Congress.
Perhaps the most serious obstacle is that calling off the program now could trigger layoffs at
Bath Iron Works because it would be difficult to bring Arleigh Burke work online fast
enough to replace the lost Zumwalt orders. The Brunswick Naval Air Station in Maine is
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closing next year, so the prominence of Bath Iron Works in the state’s economy looms even
larger.38
At a May 6, 2010, hearing on Navy shipbuilding programs before the Seapower subcommittee of
the Senate Armed Services Committee, the following exchange occurred between Senator Jack
Reed and Sean Stackley, the Navy’s acquisition executive (i.e., the Assistant Secretary of the
Navy [Research, Development and Acquisition]):
SENATOR REED:
Thank you. And let me ask one final question in this round before I recognize Senator
Wicker. And that is, with respect to the DDG 1000, Secretary Stackley, it has breached the
Nunn-McCurdy line, so there’s a technical review under way.
My understanding is the principal cause of that is the truncation of the program from seven
ships to three ships, and can you comment on that?
And second, what effect will this have on the program as it exists today, the truncated
program?
STACKLEY:
Yes, sir. Let me start with the baseline for the DDG 1000 program, was struck at Milestone
B, when it was, at that point in time, a 10-ship program.
And when you look at the criteria for determining the procurement acquisition unit costs,
you have both an R&D component as well as a procurement component.
So the program has a healthy R&D component stream that preceded procurement. And so
when you go from a 10-ship program to a seven and then ultimately to a three-ship program,
that R&D front end basically gets divided in the three ships and becomes a significant
burden on the average unit cost.
That became the mechanism that triggered the Nunn-McCurdy critical breach. And we're
going through the process right now to meet the criteria for certifying continuation of the
program, where we have five criteria that we need to certify.
We are more than midstream through that process; 4 June [2010] is our requirement to
certify or other [sic] back to the Hill. And as you indicated in your remarks, the driver for
this particular program has to deal with the quantity—the quantity impact on the average unit
cost.39
Later in the hearing, the following exchange occurred between Senator Susan Collins and
Stackley:
SENATOR COLLINS:
38 John M. Donnelly, “Weapons-Grade Political Dilemma,” CQ Weekly, March 1, 2010: 472.
39 Source: Transcript of hearing.
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I recognize that the process to recertify the DDG 1000 in light of this [Nunn-McCurdy]
breach requires significant analysis. And you indicated to the chairman that you're about
halfway through that process.
I am concerned, however, that these delays are going to have an impact on program
schedule, on program cost and on the maintenance of the workforce, unless it comes to a
closure soon.
Could you give us some better understanding of how soon you think the process will be
completed and when the second and third DDG 1000 ships could be put under contract?
STACKLEY:
Yes, ma'am. Let me start with the schedule: 4 June [2010] is the hard and fast date that we
need to meet for certification. And it's—it’s a pretty well understood date for all the number
(inaudible), frankly, and we're driving to that date, now, and we will have all the issues
addressed to support that schedule.
With regards to construction contracts, in fact, Bath Iron Works has construction contracts
for both DDG 1000 and DDG 1001. So since the original program had production split over
two shipyards, BIW had a piece of 1001 when that ship was contracted with Northrop
Grumman. As the contract has moved north [to BIW], they still have a core piece of their
workshare on 1001.
We have a proposal in hand for the balance of the ship under a fixed price proposal, and we
are negotiating those details so that, when we come out of the Nunn-McCurdy process, we
can quickly conclude the contract actions that are necessary.
In the interim, we have existing material procurement contracts so that we can keep material
orders on schedule without causing disruption to those ships’ construction schedules to
keep—as I was saying—to keep the costs contained.40
Multiyear Procurement (MYP) for Flight IIA DDG-51s
Multiyear procurement (MYP), also known as multiyear contracting, is a special contracting
authority that Congress permits DOD to use for a small number of procurement programs. MYP
permits the service in question to use a single contract to contract for multiple copies of an item
that are scheduled to be procured over a period of up to five years. MYP reduces the cost of the
items being procured by giving the production plant the confidence in future business that it
needs to make labor force and capital plant investments that can reduce the production cost of the
item being procured, and because MYP also permits certain long lead-time components of the
items to be procured up front, in the first year or two of the MYP arrangement, permitting the
manufacturers of these components to make them more economically. The authority to order long
lead-time components up front, in batch form, is called economic order quantity (EOQ). Although
the savings realized from using MYP arrangements varies from program to program, a typical
savings is roughly 10% of the total cost of the items being procured, of which roughly half might
be due to labor force and capital plant investments at the production plant, and roughly half to
EOQ procurement of long lead-time components.
40 Source: Transcript of hearing.
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The statute governing MYP contracts is located at 10 U.S.C. 2603b. Under 10 U.S.C. 2306b,
programs being considered for MYP must meet certain criteria.
MYP contracts were used to procure 13 Flight IIA DDG-51s in FY1998-FY2001, and to procure
11 more Flight IIA DDG-51s in FY2002-FY2005. Some observers are interested in the option of
using a third MYP contract to procure the eight Flight IIA DDG-51s scheduled for procurement in
FY2011-FY2015.
At a May 6, 2010, hearing on Navy shipbuilding programs before the Seapower subcommittee of
the Senate Armed Services Committee, the following exchange occurred between Senator Susan
Collins and Sean Stackley, the Navy’s acquisition executive (i.e., the Assistant Secretary of the
Navy [Research, Development and Acquisition]):
SENATOR COLLINS:
Mr. Stackley, in Secretary [of Defense Robert] Gates’ speech on Monday [May 3, 2010], he
talked about the need for the Navy and the industry to find ways to build the ships more
economically. One way to do that is for the Navy to make greater use of multiyear
procurement contracts.
As the Navy looks at the restart of the DDG 51 line, are you giving consideration to the use
of multiyear procurement contracts?
STACKLEY:
Absolutely, we are. We've used two multiyears in the past with the DDG 51 program that
provided great benefit. We are not ready yet, the initiation of the restart, to go right into a
multiyear.
We do owe Congress an acquisition strategy [for the Flight IIA DDG-51s to be procured
through FY2015]. And in formulating that acquisition strategy, we'll be addressing an
approach that considers multiyear, perhaps in 2013.41
FY2011 Legislative Activity
FY2011 Funding Request
The Navy’s proposed FY2011 budget was submitted to Congress on February 1, 2010. The two
DDG-51s that the Navy wants to procure in FY2011 received $577.2 million in FY2010 advance
procurement funding. The Navy’s proposed FY2011 budget requests another $2,922.2 million in
procurement funding for the two ships, so as to complete their estimated combined procurement
cost of $3,499.2 million. The Navy’s proposed FY2011 budget also requests $48.0 million in
advance procurement funding for the one DDG-51 that the Navy wants to procure in FY2012,
$186.3 million in procurement funding for DDG-1000 program-completion costs, and $228.4
million in research and development funding for the AMDR. The funding request for the AMDR
is contained in the Navy’s research and development account in Project 3186 (“Air and Missile
Defense Radar”) of Program Element (PE) 0604501N (“Advanced Above Water Sensors”).
41 Source: Transcript of hearing.
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FY2011 Defense Authorization Bill (H.R. 5136)
House
The House Armed Services Committee, in its report (H.Rept. 111-491 of May 21, 2010) on the
FY2011 defense authorization bill (H.R. 5136), recommends approval of the Navy’s requests for
FY2011 procurement and advance procurement funding for the DDG-51 and DDG-1000
programs (page 73), and for FY2011 research and development funding for the AMDR (page
150).42 The report states:
DDG 51 class destroyer
The committee is pleased with the effort by the Navy to undertake a comprehensive analysis
of the radar and hull alternatives needed for a future sea-based ballistic missile defense
(BMD) platform. The analysis has determined that the proposed Air and Missile Defense
Radar (AMDR) system matched to a DDG 51 class destroyer hull is the most cost-effective
method of fielding a new generation of sea-based BMD. The committee notes that this new
radar development program will leverage existing technologies of both the DDG 1000 class
destroyer program and the DDG 51 class destroyer program. The committee understands that
the AMDR system is not likely to reach full development for a number of years and that a
funding authorization request for the first ship will not occur until fiscal year 2016. In the
meantime, the committee understands that the Navy’s plan is to continue the restart of the
DDG 51 production line begun last year using a procurement strategy of three ships every
two years in a ‘‘2–1–2–1’’ build plan. The committee has significant concerns whether such
an acquisition strategy can sustain a competitive relationship between the two current surface
warfare construction yards.
DDG 1000 class destroyer
The committee is concerned with the Nunn-McCurdy cost breach incurred by the DDG 1000
destroyer program. The committee understands that the current cost breach was caused by
costs associated with research and development efforts charged against only three vessels
vice the original seven.
The committee notes that this cost threshold breach was known by the Navy far in advance
of the receipt of notification required by law. The committee was informed that official
notification of the cost breach was not technically required until after submission of the
budget request for fiscal year 2011, as the budget request was the official truncation of the
class to three vessels. This argument is disingenuous in that both the Secretary of Defense
and the Secretary of the Navy made public statements and transmitted official
correspondence to the committee that the program would be truncated to three vessels as
early as mid–2008.
However, regardless of how the Navy has arrived at this juncture, the fact remains that one
vessel is currently under construction and significant materiel orders have been made for the
second. The committee is also keenly aware of the industrial base consequences of a decision
by the Secretary of Defense to terminate the program. (Pages 75-76)
The report also states:
42 The report recommends approval of the Navy’s funding request for PE 0604501N (“Advanced Above Water
Sensors”), which includes, among other things, Project 3186 (“Air and Missile Defense Radar”).
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Composite deckhouse design for DDG 51 flight III class ships
The budget request contained $17.9 million in PE 63563N for ship concept advanced design,
but contained no funds for development of a composite deckhouse for flight III of the DDG
51 class destroyer.
The committee supports the Navy decision to re-start the DDG 51 class destroyer acquisition
program and to work toward a flight III version of the vessel by fiscal year 2016. To support
the goal of that flight of ships of advanced radar and ship control systems, the Navy must
make significant design changes to the class, in order to upgrade power and cooling
capability. The committee realizes that those design changes have the potential to add
significant weight to the vessel which could limit operational effectiveness. The committee
supports an effort, aimed at reducing overall lifecycle costs of the class, to develop a
composite deckhouse for the flight III ships that would significantly reduce the weight to
center of buoyancy ratio and increase operational effectiveness of the vessel. The committee
notes that the technological advancements for the composite deckhouse of the DDG 1000
program can significantly aid this effort.
The committee recommends an increase of $10.0 million in PE 63563N for development of a
composite deckhouse for potential use on flight III DDG 51 class destroyers. (Page 157)
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Appendix. Additional Background Information on
DDG-1000 Program
This appendix presents additional background information on the DDG-1000 program.
Program Origin
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:43
• 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, 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.44
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.45
New Technologies
The DDG-1000 incorporates a significant number of new technologies, including a wave-
piercing, tumblehome hull design for reduced detectability,46 a superstructure made partly of large
sections of composite (i.e., fiberglass-like) materials rather than steel or aluminum, an integrated
43 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).
44 For more on the LCS program, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background,
Issues, and Options for Congress, by Ronald O'Rourke.
45 For more on Navy ship names, see CRS Report RS22478, Navy Ship Names: Background for Congress, by Ronald
O’Rourke.
46 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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electric-drive propulsion system,47 a total-ship computing system for moving information about
the ship, automation technologies enabling its 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.”
Planned Quantity
When the DD-21 program was initiated, a total of 32 ships was envisaged. In subsequent years,
the planned total for the DD(X)/DDG-1000 program was reduced to 16 to 24, then to 7, and
finally to 3.
Construction Shipyards
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.
47 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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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 acquisition
strategy and a low rate initial production quantity of eight ships (one more than the Navy
subsequently planned to procure).
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.
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 September 25, 2007,
the Navy announced that it had decided to build the first DDG-1000 at GD/BIW, and the second
at NGSB.
On January 12, 2009, it was reported that the Navy, NGSB, and GD/BIW in the fall of 2008
began holding discussions on the idea of having GD/BIW build both the first and second DDG-
1000s, in exchange for NGSB receiving a greater share of the new DDG-51s that would be
procured under the Navy’s July 2008 proposal to stop DDG-1000 procurement and restart DDG-
51 procurement.48
On April 8, 2009, it was reported that the Navy had reached an agreement with NGSB and
GD/BIW to shift the second DDG-1000 to GD/BIW, and to have GD/BIW build all three ships.
NGSB will continue to make certain parts of the three ships, notably their composite deckhouses.
The agreement to have all three DDG-1000s built at GD/BIW was a condition that Secretary of
Defense Robert Gates set forth in an April 6, 2009, news conference on the FY2010 defense
budget for his support for continuing with the construction of all three DDG-1000s (rather than
proposing the cancellation of the second and third).
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. Given the truncation of the DDG-1000 program to three ships, this unit
procurement cost cap appears moot.
March 2009 GAO Report
A March 2009 Government Accountability Office (GAO) report assessing major DOD weapon
acquisition programs stated the following of the DDG-1000 program:
48 Christopher P. Cavas, “Will Bath Build Second DDG 1000?” Defense News, January 12, 2009: 1, 6.
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Technology Maturity
Three of DDG 1000’s 12 critical technologies are mature, and an additional 8 have been
demonstrated in a relevant environment. Practical limitations prevent the Navy from fully
demonstrating all technologies in a realistic environment prior to installation. The Navy
planned to fully demonstrate the integrated deckhouse prior to ship construction start in
February 2009, but land-based testing was delayed. Testing is now scheduled to complete by
March 2010—over a year after deckhouse construction began. The integrated power system
will not be tested with the control system until 2011—nearly 3 years later than planned. As a
result, the power system will not be demonstrated until after its installation on the first two
ships. The volume search radar has progressed in maturity and began testing with the
multifunction radar in January 2009. However, program officials report that the tests were
conducted without the volume search radar’s radome and at a lower voltage than required.
The lead ship’s volume search radar will be installed in April 2013—after the Navy has
taken custody of the ship. The total ship computing environment (phased over six releases
and one spiral) remains at a lower level of maturity and will not be completed until after the
lead ship’s systems are activated. Program officials report that problems identified in release
4 have been resolved in release 5, which is currently undergoing integration testing.
However, the Defense Contract Management Agency expects that problems discovered in
releases 4 and 5 will cause release 6 to have higher defect rates than planned, and additional
cost and schedule delays.
Design Maturity
The design of the DDG 1000 appears stable, although the continuing maturation of critical
technologies could result in design changes. The design was 88 percent complete at the start
of lead ship construction, and 100 percent complete shortly thereafter.
Production Maturity
Lead ship construction began in February 2009 and 68 percent of the units that make up the
ship are now in fabrication. The Navy reported that it contractually requires the shipbuilders
to specify detailed structural attributes to be monitored during unit fabrication and
integration in order to reduce the risk of rework. According to program officials, this
contractual requirement is a first for large Navy shipbuilding programs. The program
initially experienced higher than expected rejection rates on the peripheral vertical launch
system, which program officials reported were resolved. The Navy anticipates awarding
construction contracts for the second and third ships by June 2010.
Other Program Issues
The Navy reduced the number of ships in the DDG 1000 program from 7 to 3 ships in fiscal
year 2008. Program officials stated that truncating the program will likely cause an increase
in the cost per ship. Navy officials reported that this could result in a Nunn-McCurdy unit
cost breach of the critical cost growth threshold. In addition, some contractor costs that were
previously distributed over the planned 7-ship program will now be allocated to the 3-ship
program. In fiscal year 2010, the Navy requested $310 million to fund these costs. The Navy
anticipates requesting additional funds for this purpose during fiscal years 2011-2014.
The Navy is conducting a Future Surface Combatant study, which program officials say
includes a review of hull options for this new ship program. One option being considered is
the DDG 1000 hull form. The Navy expects to incorporate the final decision from this study
in the fiscal year 2011 budget.
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Program Office Comments
The Navy stated that three critical technologies are mature and that all technologies have
been demonstrated in at least a relevant environment, except for the total ship computing
environment which will increase in maturity on the completion of release 5. The Navy noted
that release 5 includes most combat systems-related functionality and release 6 focuses on
engineering control, which is mostly independent of combat systems. The Navy noted that
the software schedule has a margin available before software is needed for land-based and
ship testing. The Navy stated that the power system will be tested on land in 2011 using
components of the third ship before lead ship testing begins. The Navy noted that the volume
search radar prototype was built at a lower voltage to limit risk, and that prototype
integration tests are not dependent on the voltage or radome. The Navy stated that full-
voltage modules have been produced and tested, and that a lead-ship radar will be tested in
2012 with a radome.49
Author Contact Information
Ronald O'Rourke
Specialist in Naval Affairs
rorourke@crs.loc.gov, 7-7610
49 Government Accountability Office, Defense Acquisitions[:] Assessments of Selected Weapon Programs, GAO-10-
388SP, March 2010, p. 56.
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