Navy Constellation (FFG-62) Class Frigate (Previously FFG[X]) Program: Background and Issues for Congress




Navy Constellation (FFG-62) Class Frigate
(Previously FFG[X]) Program: Background and
Issues for Congress

Updated October 8, 2020
Congressional Research Service
https://crsreports.congress.gov
R44972




Navy Constellation (FFG-62) Class Frigate (Previously FFG[X]) Program

Summary
The Constellation (FFG-62) class frigate program, previously known as the FFG(X) program, is a
Navy program to build a class of 20 guided-missile frigates (FFGs). Congress funded the
procurement of the first FFG-62 class ship in FY2020 at a cost of $1,281.2 million (i.e., about
$1.3 billion). The Navy’s proposed FY2021 budget requests $1,053.1 million (i.e., about $1.1
billion) for the procurement of the second FFG-62 class ship. The Navy estimates that subsequent
ships in the class will cost roughly $940 million each in then-year dollars.
Four industry teams were competing for the FFG-62 program. On April 30, 2020, the Navy
announced that it had awarded the FFG-62 contract to the team led by Fincantieri/Marinette
Marine (F/MM) of Marinette, WI. F/MM was awarded a fixed-price incentive (firm target)
contract for Detail Design and Construction (DD&C) for up to 10 ships in the program—the lead
ship plus nine option ships.
The other three industry teams reportedly competing for the program were led by Austal USA of
Mobile, AL; General Dynamics/Bath Iron Works (GD/BIW) of Bath, ME; and Huntington Ingalls
Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS.
Under the DD&C contact awarded to F/MM, Navy has the option of recompeting the FFG-62
program after the lead ship (if none of the nine option ships are exercised), after the 10th ship (if
all nine of the option ships are exercised), or somewhere in between (if some but not all of the
nine option ships are exercised).
All four competing industry teams were required to submit bids based on an existing ship
design—an approach called the parent-design approach. F/MM’s design is based on an Italian
frigate design called the FREMM (Fregata Europea Multi-Missione).
As part of its action on the Navy’s FY2020 budget, Congress passed two legislative provisions
relating to U.S. content requirements for certain components of each FFG-62 class ship.
The FFG-62 program presents several potential oversight issues for Congress, including the
following:
 the potential impact of the COVID-19 (coronavirus) situation on the execution of
U.S. military shipbuilding programs, including the FGFG(X) program;
 the accuracy of the Navy’s estimated unit procurement cost for the FFG-62 class
ship, particularly when compared to the known unit procurement costs of other
recent U.S. surface combatants;
 whether to fund the procurement in FY2021 of one FFG-62 class ship (the
Navy’s request), no FFG-62, or two FFG-62s;
 whether to build FFG-62s at a single shipyard at any one time (the Navy’s
baseline plan), or at two or three shipyards;
 whether the Navy has appropriately defined the required capabilities and growth
margin of the FFG-62.
 whether to take any further legislative action regarding U.S. content requirements
for FFG-62s;
 technical risk in the FFG-62 program;
 the potential industrial-base impacts of the FFG-62 program for shipyards and
supplier firms in the context of other Navy and Coast Guard shipbuilding
programs.
Congressional Research Service

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Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 1

Navy’s Force of Small Surface Combatants (SSCs) ................................................................. 1
Overview ............................................................................................................................. 1
Current 52-Ship SSC Force-Level Goal Within Navy’s 355-Ship Plan ............................. 1
Potential SSC Force-Level Goal of 60 to 70 Ships Under New Battle Force
2045 Plan ......................................................................................................................... 2
Number of SSCs in Service ................................................................................................ 3
U.S. Navy Frigates in General .................................................................................................. 3
FFG-62 Class Program .............................................................................................................. 4
Program Name .................................................................................................................... 4
Procurement Quantities and Schedule ................................................................................ 5
Ship Capabilities, Design, and Crewing ............................................................................. 6
Procurement Cost ................................................................................................................ 7
Acquisition Strategy............................................................................................................ 8
U.S. Content Requirements for Components ...................................................................... 9
Competing Industry Teams ................................................................................................ 11
Detail Design and Construction (DD&C) Contract ........................................................... 11
Contract Award ................................................................................................................. 12
Design Selected for FFG-62 Program ............................................................................... 14
Program Funding .............................................................................................................. 15
Issues for Congress ........................................................................................................................ 15
Potential Impact of COVID-19 Situation ................................................................................ 15
Accuracy of Navy’s Estimated Unit Procurement Cost .......................................................... 15
Number of FFG-62s to Procure in FY2021 ............................................................................ 18
Number of FFG-62 Builders ................................................................................................... 19
U.S. Content Requirements ..................................................................................................... 19
Required Capabilities and Growth Margin ............................................................................. 20
Analytical Basis for Desired Ship Capabilities ................................................................. 20
Number of VLS Tubes ...................................................................................................... 20
Growth Margin .................................................................................................................. 21
Technical Risk ......................................................................................................................... 22
June 2020 GAO Report ..................................................................................................... 22
Guaranty vs. Warranty in Construction Contract .............................................................. 23
Potential Industrial-Base Impacts of FFG-62 Program ........................................................... 26
Legislative Activity for FY2021 .................................................................................................... 26
Summary of Congressional Action on FY2021 Funding Request .......................................... 26
FY2021 National Defense Authorization Act (H.R. 6395/S. 4049) ........................................ 27
House ................................................................................................................................ 27
Senate ................................................................................................................................ 27

FY2021 DOD Appropriations Act (H.R. 7617) ...................................................................... 28
House ................................................................................................................................ 28

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Figures
Figure 1. Oliver Hazard Perry (FFG-7) Class Frigate ..................................................................... 4
Figure 2. Navy Briefing Slide on FFG-62 Capabilities ................................................................... 7
Figure 3. Oliver Hazard Perry (FFG-7) Class Frigate ................................................................... 14

Tables
Table 1. Programmed Annual FFG-62 Procurement Quantities ...................................................... 6
Table 2. Industry Teams Reportedly Competing for FFG-62 Program .......................................... 11
Table 3. FFG-62 Program Procurement Funding .......................................................................... 15
Table 4. Congressional Action on FY2021 Procurement Funding Request .................................. 27

Appendixes
Appendix A. Navy Briefing Slides from July 25, 2017, FFG-62 Industry Day Event .................. 30
Appendix B. Competing Industry Teams ...................................................................................... 36

Contacts
Author Information ........................................................................................................................ 38

Congressional Research Service

Navy Constellation (FFG-62) Class Frigate (Previously FFG[X]) Program

Introduction
This report provides background information and discusses potential issues for Congress
regarding the Navy’s Constellation (FFG-62) class frigate program, previously known as the
FFG(X) program. The FFG-62 class program is a program to procure a new class of 20 guided-
missile frigates (FFGs). The Navy’s proposed FY2021 budget requests $1,053.1 million (i.e.,
about $1.1 billion) for the procurement of the second FFG-62.
The FFG-62 program presents several potential oversight issues for Congress. Congress’s
decisions on the program could affect Navy capabilities and funding requirements and the
shipbuilding industrial base.
This report focuses on the FFG-62 program. Other CRS reports discuss the strategic context
within which the FFG-62 program and other Navy acquisition programs may be considered.1
Background
Navy’s Force of Small Surface Combatants (SSCs)
Overview
In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface
combatants into large surface combatants (LSCs), meaning the Navy’s cruisers and destroyers,
and small surface combatants (SSCs), meaning the Navy’s frigates, LCSs, mine warfare ships,
and patrol craft.2 SSCs are smaller, less capable in some respects, and individually less expensive
to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other
Navy ships, particularly in higher-threat operating environments, or independently, particularly in
lower-threat operating environments.
Current 52-Ship SSC Force-Level Goal Within Navy’s 355-Ship Plan
In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships,
including 52 SSCs, of which 32 are to be LCSs and 20 are to be FFG-62s. Although patrol craft
are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not
considered battle force ships, which are the kind of ships that count toward the quoted size of the
Navy and the Navy’s force-level goal.3

1 See CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke; CRS Report R43838, Renewed Great Power Competition: Implications for Defense—Issues for
Congress
, by Ronald O'Rourke; and CRS Report R44891, U.S. Role in the World: Background and Issues for
Congress
, by Ronald O'Rourke and Michael Moodie.
2 See, for example, CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for
Congress
, by Ronald O'Rourke.
3 For more on the 355-ship plan and additional discussion of battle force ships, see CRS Report RL32665, Navy Force
Structure and Shipbuilding Plans: Background and Issues for Congress
, by Ronald O'Rourke.
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Potential SSC Force-Level Goal of 60 to 70 Ships Under New Battle Force
2045 Plan

As discussed in greater detail in the CRS overview report on Navy force-structure and
shipbuilding plans,4 the Navy and the Department of Defense (DOD) since 2019 have been
working to develop a new Navy force-level goal to replace the above-mentioned 355-ship force-
level goal. The conclusion of this work and the release of its results to Congress have been
delayed repeatedly since late 2019.
Remarks from Navy and DOD officials since 2019 indicate that this new Navy force-level goal
will introduce at least some elements of a once-in-a-generation change in fleet architecture,
meaning basic the types of ships that make up the Navy and how these ships are used in
combination with one another to perform Navy missions. This new fleet architecture is expected
to be more distributed than the fleet architecture reflected in the 355-ship goal or previous Navy
force-level goals. In particular, the new fleet architecture is expected to feature
 a smaller proportion of larger ships (such as large-deck aircraft carriers, cruisers,
destroyers, large amphibious ships, and large resupply ships);
 a larger proportion of smaller ships (such as frigates, corvettes, smaller
amphibious ships, smaller resupply ships, and perhaps smaller aircraft carriers);
and
 a new third tier of surface vessels about as large as corvettes or large patrol craft
that will be either lightly manned, optionally manned, or unmanned, as well as
large unmanned underwater vehicles (UUVs).
Navy and DOD leaders believe that shifting to a more distributed fleet architecture is
operationally necessary, to respond effectively to the improving maritime anti-
access/area-denial (A2/AD) capabilities of other countries, particularly China;5
technically feasible as a result of advances in technologies for UVs and for
networking widely distributed maritime forces that include significant numbers
of UVs; and

4 CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke.
5 See, for example, David B. Larter, “With China Gunning for Aircraft Carriers, US Navy Says It Must Change How It
Fights,” Defense News, December 6, 2019; Arthur H. Barber, “Redesign the Fleet,” U.S. Naval Institute Proceedings,
January 2019. Some observers have long urged the Navy to shift to a more distributed fleet architecture, on the grounds
that the Navy’s current architecture—which concentrates much of the fleet’s capability into a relatively limited number
of individually larger and more expensive surface ships—is increasingly vulnerable to attack by the improving A2/AD
capabilities (particularly anti-ship missiles and their supporting detection and targeting systems) of potential
adversaries, particularly China. Shifting to a more distributed architecture, these observers have argued, would

complicate an adversary’s targeting challenge by presenting the adversary with a larger number of Navy units
to detect, identify, and track;

reduce the loss in aggregate Navy capability that would result from the destruction of an individual Navy
platform;

give U.S. leaders the option of deploying USVs and UUVs in wartime to sea locations that would be
tactically advantageous but too risky for manned ships; and

increase the modularity and reconfigurability of the fleet for adapting to changing mission needs.
For more on China’s maritime A2/AD capabilities, see CRS Report RL33153, China Naval Modernization:
Implications for U.S. Navy Capabilities—Background and Issues for Congress
, by Ronald O'Rourke.
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affordable—no more expensive, and possibly less expensive, than the current
fleet architecture, so as to fit within expected future Navy budgets.
On October 6, 2020, in remarks made in Washington, DC, at an event held at a private think tank
called the Center for Strategic and Budgetary Assessments (CSBA), Secretary of Defense Mark
Esper provided some details on the Trump Administration’s new Navy force-level goal, which it
calls Battle Force 2045. This new force-level goal, which appears generally consistent with the
more distributed fleet architecture outlined above, calls for achieving a fleet of more than 500
manned and unmanned ships by 2045, including 355 manned ships prior to 2035. Esper stated
that the Battle Force 2045 plan will include 60 to 70 SSCs—an increase of 8 to 18 ships over the
52-ship force-level goal in the current 355-ship plan.6
Number of SSCs in Service
Under the Navy’s proposed FY2020 budget, the Navy projected that it would have 30 SSCs in
service at the end of FY2020, including no frigates, 19 LCSs, and 11 mine warfare ships.7 Under
the Navy’s FY2020 30-year (FY2020-FY2049) shipbuilding plan, the SSC force is to grow to 52
ships (34 LCSs and 18 FFG[X]s) by FY2034.
U.S. Navy Frigates in General
In contrast to cruisers and destroyers, which are designed to operate in higher-threat areas,
frigates are generally intended to operate more in lower-threat areas. U.S. Navy frigates perform
many of the same peacetime and wartime missions as U.S. Navy cruisers and destroyers, but
since frigates are intended to do so in lower-threat areas, they are equipped with fewer weapons,
less-capable radars and other systems, and less engineering redundancy and survivability than
cruisers and destroyers.8
The most recent class of frigates operated by the Navy was the Oliver Hazard Perry (FFG-7) class
(Figure 1). A total of 51 FFG-7 class ships were procured between FY1973 and FY1984. The
ships entered service between 1977 and 1989, and were decommissioned between 1994 and 2015.
In their final configuration, FFG-7s were about 455 feet long and had full load displacements of
roughly 3,900 tons to 4,100 tons. (By comparison, the Navy’s Arleigh Burke [DDG-51] class
destroyers are about 510 feet long and have full load displacements of roughly 9,700 tons.9)

6 For more on the Battle Force 2045 plan, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans:
Background and Issues for Congress
, by Ronald O'Rourke.
7 Department of the Navy, Highlights of the Department of the Navy FY 2021 Budget, February 10, 2020, Figure 3-2
on p. 3-2.
8 Compared to cruisers and destroyers, frigates can be a more cost-effective way to perform missions that do not require
the use of a higher-cost cruiser or destroyer. In the past, the Navy’s combined force of higher-capability, higher-cost
cruisers and destroyers and lower-capability, lower-cost frigates has been referred to as an example of a so-called high-
low force mix. High-low mixes have been used by the Navy and the other military services in recent decades as a
means of balancing desires for individual platform capability against desires for platform numbers in a context of
varied missions and finite resources.
Peacetime missions performed by frigates can include, among other things, engagement with allied and partner navies,
maritime security operations (such as anti-piracy operations), and humanitarian assistance and disaster response
(HA/DR) operations. Intended wartime operations of frigates include escorting (i.e., protecting) military supply and
transport ships and civilian cargo ships that are moving through potentially dangerous waters. In support of intended
wartime operations, frigates are designed to conduct anti-air warfare (AAW—aka air defense) operations, anti-surface
warfare (ASuW) operations (meaning operations against enemy surface ships and craft), and antisubmarine warfare
(ASW) operations. U.S. Navy frigates are designed to operate in larger Navy formations or as solitary ships. Operations
as solitary ships can include the peacetime operations mentioned above.
9 This is the displacement for the current (Flight III) version of the DDG-51 design.
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Following their decommissioning, a number of FFG-7 class ships, like certain other
decommissioned U.S. Navy ships, have been transferred to the navies of U.S. allied and partner
countries.
Figure 1. Oliver Hazard Perry (FFG-7) Class Frigate

Source: Photograph accompanying Dave Werner, “Fighting Forward: Last Oliver Perry Class Frigate
Deployment,” Navy Live, January 5, 2015, accessed September 21, 2017, at http://navylive.dodlive.mil/2015/01/05/
fighting-forward-last-oliver-perry-class-frigate-deployment/.
FFG-62 Class Program
Program Name
The FFG-62 class program was previously known as the FFG(X) program.10 On October 7, 2020,
the Navy announced that FFG-62 would be named Constellation, in honor of the first U.S. Navy
ships authorized by Congress in 1794—the six heavy frigates United States, Constellation,
Constitution, Chesapeake, Congress, and President.11 FFG(X)s henceforth became known as

10 In the designation FFG(X), FF meant frigate, G meant guided-missile ship (indicating a ship equipped with an area-
defense anti-air warfare [AAW] system), and (X) indicated that the specific design of the ship had not yet been
determined. FFG(X) thus meant a guided-missile frigate whose specific design has not yet been determined.
The designation FF, with two Fs, means frigate in the same way that the designation DD, with two Ds, means
destroyer. FF is sometimes translated less accurately as fast frigate. FFs, however, are not particularly fast by the
standards of U.S. Navy combatants—their maximum sustained speed, for example, is generally lower than that of U.S.
Navy aircraft carriers, cruisers, and destroyers. In addition, there is no such thing in the U.S. Navy as a slow frigate.
Some U.S. Navy surface combatants are equipped with a point-defense AAW system, meaning a short-range AAW
system that is designed to protect the ship itself. Other U.S. Navy surface combatants are equipped with an area-
defense AAW system, meaning a longer-range AAW system that is designed to protect no only the ship itself, but other
ships in the area as well. U.S. Navy surface combatants equipped with an area-defense AAW system are referred to as
guided-missile ships and have a “G” in their designation.
11 Department of the Navy, “SECNAV Names Navy’s Newest Class of FFG(X) Ships,” October 7, 2020. The Navy’s
announcement about the naming of FFG-62 did not make clear what the naming rule for the class will be. Since the
Navy plans to procure many more than six FFG-62s, one possibility is that the ships will be named for historic Navy
ships in general. Previous classes of U.S. Navy frigates, like Navy destroyers, were generally named for naval leaders
and heroes. The Navy’s announcement (cited above) states:
Secretary of the Navy Kenneth J. Braithwaite announced USS Constellation (FFG 62) as the name
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Constellation (FFG-62) class ships. Even though the program is now known as the FFG-62
program, Navy documents and other sources may continue for some time to refer to it as the
FFG(X) program.
Procurement Quantities and Schedule
Total Procurement Quantity
The Navy wants to procure 20 FFG-62s, which in combination with the Navy’s required total of
32 LCSs would meet the Navy’s 52-ship SSC force-level goal within the Navy’s current 355-ship
plan. Thirty-five (rather than 32) LCSs were procured through FY2019, but Navy officials have
stated that the Navy nevertheless wants to procure 20 FFG-62s.
As discussed earlier, on October 6, 2020, Secretary of Defense Mark Esper provided some details
on the Trump Administration’s new Navy force-level goal, which it calls Battle Force 2045. This
new force-level goal, which is intended to replace the 355-ship plan, calls for achieving a fleet of
more than 500 manned and unmanned ships by 2045, including 355 manned ships prior to 2035.
Esper stated that the Battle Force 2045 plan will include 60 to 70 SSCs—an increase of 8 to 18
ships over the 52-ship SSC force-level goal in the current 355-ship plan. Implementing the Battle
Force 2045 plan might involve increasing the planned number of FFG-62s from 20 to as many as
38.
Annual Procurement Quantities
Congress funded the procurement of the first FFG-62 in FY2020. The Navy’s FY2021 budget
submission calls for the next nine to be procured during the period FY2021-FY2025 in annual
quantities of 1-1-2-2-3.

for the first ship in the new Guided Missile Frigate (FFG(X)) class of ships Oct. 7 while aboard the
museum ship Constellation in Baltimore Inner Harbor.
The name was selected in honor of the first U.S. Navy ships authorized by Congress in 1794 -- six
heavy frigates named United States, Constellation, Constitution, Chesapeake, Congress, and
President. These ships established the Continental Navy as an agile, lethal and ready force for the
19th century. This will be the fifth U.S. Navy ship to bear the name Constellation.
“As the first in her class, these ships will now be known as the Constellation Class frigates, linking
them directly to the original six frigates of our Navy, carrying on the traditions of our great service
which have been passed down from generation to generation of Sailors,” said Braithwaite. “While
providing an unmatched capability and survivability for the 21st Century, Constellation Class
Frigates will honor our Navy’s historic beginnings as we continue to operate around the world in
today’s era of Great Power Competition.”…
Constellation is a historic name with a long Naval history. The original name was submitted to
President Washington in 1795 to represent the ‘new constellation of stars’ on the United States flag.
The first Constellation was a 38-gun frigate with a crew of 340 personnel. The ship was built in
Baltimore in 1797 and remained in service until 1853.
The second Constellation was a sloop-of-war launched in 1854 and was the last sail-only warship
designed and built by the U.S. Navy. The ship currently stands as a museum in Baltimore.
The keel for a third ship named Constellation was laid, but the ship was never completed in the
peace years following WWI.
The most prominent Constellation is the Kitty-Hawk class conventional aircraft carrier that
commissioned in 1961. It had a storied history to include overcoming several catastrophic fires on
board, supporting operations during the Vietnam War, the first Persian Gulf War, and Operations
Enduring and Iraqi Freedom before decommissioning in 2003.
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Table 1 compares programmed annual procurement quantities for the FFG-62 program in
FY2021-FY2025 under the Navy’s FY2020 and FY2021 budget submissions. The programmed
quantity of three ships in FY2025 under the Navy’s FY2021 budget submission, if sustained
beyond FY2025, could accelerate the achievement of a force of 20 or more FFG-62s.
Table 1. Programmed Annual FFG-62 Procurement Quantities
As shown in Navy’s FY2020 and FY2021 budget submissions

FY21
FY22
FY23
FY24
FY25
Total FY21-FY25
FY2020 budget
2
2
2
2
2
10
FY2021 budget
1
1
2
2
3
9
Source: Table prepared by CRS based on Navy’s FY2020 and FY2021 budget submissions.
Ship Capabilities, Design, and Crewing
Ship Capabilities and Design
The Navy envisages the FFG-62 as follows:
 The ship is to be a multimission small surface combatant capable of conducting
anti-air warfare (AAW), anti-surface warfare (ASuW), antisubmarine warfare
(ASW), and electromagnetic warfare (EMW) operations.
 Compared to an FF concept that emerged under a February 2014 restructuring of
the LCS program, the FFG-62 is to have increased AAW and EMW capability,
and enhanced survivability.
 The ship’s area-defense AAW system is to be capable of local area AAW,
meaning a form of area-defense AAW that extends to a lesser range than the area-
defense AAW that can be provided by the Navy’s cruisers and destroyers.
 The ship is to be capable of operating in both blue water (i.e., mid-ocean) and
littoral (i.e., near-shore) areas.
 The ship is to be capable of operating either independently (when that is
appropriate for its assigned mission) or as part of larger Navy formations.
Figure 2 shows a January 2019 Navy briefing slide summarizing the FFG-62’s planned
capabilities. For additional information on the FFG-62’s planned capabilities, see Appendix A.12
Dual Crewing
To help maximize the time that each ship spends at sea, the Navy reportedly is considering
operating FFG-62s with dual crews—an approach, commonly called blue-gold crewing, that the
Navy uses for operating its ballistic missile submarines and LCSs.13


12 RFI: FFG(X) - US Navy Guided Missile Frigate Replacement Program, accessed August 11, 2017, at
https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=d089cf61f254538605cdec5438955b8e&
_cview=0.
13 See, for example, David B. Larter, “The US Navy Is Planning for Its New Frigate to Be a Workhorse,” Defense
News
, January 30, 2018.
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Figure 2. Navy Briefing Slide on FFG-62 Capabilities
Presented at Surface Navy Association National Symposium, January 2019

Source: Presentation by Dr. Reagan Campbell, “FFG(X) Update, National Symposium—Surface Navy
Association,” January 15, 2019, briefing slide 3, posted at InsideDefense.com (subscription required), January 22,
2019.
Procurement Cost
Congress funded the procurement of the first FFG-62 in FY2020 at a cost of $1,281.2 million
(i.e., about $1.3 billion). The lead ship in the program will be more expensive than the follow-on
ships in the program because the lead ship’s procurement cost incorporates most or all of the
detailed design/nonrecurring engineering (DD/NRE) costs for the class. (It is a traditional Navy
budgeting practice to attach most or all of the DD/NRE costs for a new ship class to the
procurement cost of the lead ship in the class.)
The Navy wants the follow-on ships in the FFG-62 program (i.e., ships 2 through 20) to have an
average unit procurement cost of $800 million to $950 million each in constant 2018 dollars.14 By

14 See Sam LaGrone, “NAVSEA: New Navy Frigate Could Cost $950M Per Hull,” USNI News, January 9, 2018;
Richard Abott, “Navy Confirms New Frigate Nearly $1 Billion Each, 4-6 Concept Awards By Spring,” Defense Daily,
January 10, 2018: 1; Sydney J. Freedberg Jr., “Navy Says It Can Buy Frigate For Under $800M: Acquisition Reform
Testbed,” Breaking Defense, January 12, 2018; Lee Hudson, “Navy to Downselect to One Vendor for Future Frigate
Competition,” Inside the Navy, January 15, 2018; Richard Abott, “Navy Aims For $800 Million Future Frigate Cost,
Leveraging Modularity and Commonality,” Defense Daily, January 17, 2018: 3. The $800 million figure is the
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way of comparison, the Navy estimates the average unit procurement cost of the three LCSs
procured in FY2019 at $523.7 million (not including the cost of each ship’s embarked mission
package), and the average unit procurement cost of the two DDG-51 class destroyers that the
Navy has requested for procurement in FY2021 at $1,918.5 million.
As shown in Table 3, the Navy’s proposed FY2021 budget requests $1,053.1 million (i.e., about
$1.1 billion) for the procurement of the second FFG-62, and estimates that subsequent ships in
the class will cost roughly $940 million each in then-year dollars. The Navy’s FY2021 budget
submission estimates the total procurement cost of 20 FFG-62s at $19,814.8 million (i.e., about
$19.8 billion) in then-year dollars, or an average of about $990.7 million each. Since the figure of
$19,814.8 million is a then-year dollar figure, it incorporates estimated annual inflation for FFG-
62s to be procured several years into the future.
Acquisition Strategy
Parent-Design Approach
The Navy’s plan to procure the first FFG-62 in FY2020 did not allow enough time to develop a
completely new design (i.e., a clean-sheet design) for the FFG-62.15 Consequently, the FFG-62 is
to be built to a modified version of an existing ship design—an approach called the parent-design
approach. The parent design can be a U.S. ship design or a foreign ship design.16
Using the parent-design approach can reduce design time, design cost, and cost, schedule, and
technical risk in building the ship. The Coast Guard and the Navy are currently using the parent-

objective cost target; the $950 million figure is threshold cost target. Regarding the $950 million figure, the Navy states
that
The average follow threshold cost for FFG(X) has been established at $950 million (CY18$). The
Navy expects that the full and open competition will provide significant downward cost pressure
incentivizing industry to balance cost and capability to provide the Navy with a best value solution.
FFG(X) cost estimates will be reevaluated during the Conceptual Design phase to ensure the
program stays within the Navy’s desired budget while achieving the desired warfighting
capabilities. Lead ship unit costs will be validated at the time the Component Cost Position is
established in 3rd QTR FY19 prior to the Navy awarding the Detail Design and Construction
contract.
(Navy information paper dated November 7, 2017, provided by Navy Office of Legislative Affairs
to CRS and CBO on November 8, 2017.)
The Navy wants the average basic construction cost (BCC) of ships 2 through 20 in the program to be $495 million per
ship in constant 2018 dollars. BCC excludes costs for government furnished combat or weapon systems and change
orders. (Source: Navy briefing slides for FFG(X) Industry Day, November 17, 2017, slide 11 of 16, entitled “Key
Framing Assumptions.”)
15 The Navy states that using an acquisition strategy involving a lengthier requirements-evaluation phase and a clean-
sheet design would defer the procurement of the first ship to FY2025. (Source: Slide 3, entitled “Accelerating the
FFG(X),” in a Navy briefing entitled “Designing & Building the Surface Fleet: Unmanned and Small Combatants,” by
Rear Admiral Casey Moton at a June 20, 2019, conference of the American Society of Naval Engineers [ASNE].)
16 For articles about reported potential parent designs for the FFG-62, see, for example, Chuck Hill, “OPC Derived
Frigate? Designed for the Royal Navy, Proposed for USN,” Chuck Hill’s CG [Coast Guard] Blog, September 15, 2017;
David B. Larter, “BAE Joins Race for New US Frigate with Its Type 26 Vessel,” Defense News, September 14, 2017;
“BMT Venator-110 Frigate Scale Model at DSEI 2017,” Navy Recognition, September 13, 2017; David B. Larter, “As
the Service Looks to Fill Capabilities Gaps, the US Navy Eyes Foreign Designs,” Defense News, September 1, 2017;
Lee Hudson, “HII May Offer National Security Cutter for Navy Future Frigate Competition,” Inside the Navy, August
7, 2017; Sydney J. Freedberg Jr., “Beyond LCS: Navy Looks To Foreign Frigates, National Security Cutter,” Breaking
Defense
, May 11, 2017.
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design approach for the Coast Guard’s Polar Security Cutter (i.e., polar icebreaker) program.17
The parent-design approach has also been used in the past for other Navy and Coast Guard ships,
including Navy mine warfare ships18 and the Coast Guard’s new Fast Response Cutters (FRCs).19
No New Technologies or Systems
As an additional measure for reducing cost, schedule, and technical risk in the FFG-62 program,
the Navy envisages developing no new technologies or systems for the FFG-62—the ship is to
use systems and technologies that already exist or are already being developed for use in other
programs.
Number of Builders
The Navy’s baseline plan for the FFG-62 program envisages using a single builder at any one
time to build the ships. The Navy has not, however, ruled out the option of building the ships at
two or three shipyards at the same time. Consistent with U.S. law,20 the ship is to be built in a
shipyard located in the United States, even if it is based on a foreign design.
U.S. Content Requirements for Components
FY2020 Legislation
As part of its action on the Navy’s FY2020 budget, Congress passed two provisions relating to
U.S. content requirements for certain components of each FFG-62.
Section 856 of the FY2020 National Defense Authorization Act (S. 1790/P.L. 116-92 of
December 20, 2019) states
SEC. 856. APPLICATION OF LIMITATION ON PROCUREMENT OF GOODS
OTHER THAN UNITED STATES GOODS TO THE FFG–FRIGATE PROGRAM.
Notwithstanding any other provision of law, amounts authorized to carry out the FFG–
Frigate Program may be used to award a new contract that provides for the acquisition of
the following components regardless of whether those components are manufactured in the
United States:
(1) Auxiliary equipment (including pumps) for shipboard services.
(2) Propulsion equipment (including engines, reduction gears, and propellers).
(3) Shipboard cranes.

17 For more on the polar security cutter program, including the parent-design approach, see CRS Report RL34391,
Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress, by Ronald
O'Rourke.
18 The Navy’s Osprey (MCM-51) class mine warfare ships are an enlarged version of the Italian Lerici-class mine
warfare ships.
19 The FRC design is based on a Dutch patrol boat design, the Damen Stan Patrol Boat 4708.
20 10 U.S.C. 8679 requires that, subject to a presidential waiver for the national security interest, “no vessel to be
constructed for any of the armed forces, and no major component of the hull or superstructure of any such vessel, may
be constructed in a foreign shipyard.” In addition, the paragraph in the annual DOD appropriations act that makes
appropriations for the Navy’s shipbuilding account (the Shipbuilding and Conversion, Navy account) typically contains
these provisos: “ ... Provided further, That none of the funds provided under this heading for the construction or
conversion of any naval vessel to be constructed in shipyards in the United States shall be expended in foreign facilities
for the construction of major components of such vessel: Provided further, That none of the funds provided under this
heading shall be used for the construction of any naval vessel in foreign shipyards.... ”
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(4) Spreaders for shipboard cranes.
Section 8113(b) of the FY2020 DOD Appropriations Act (Division A of H.R. 1158/P.L. 116-93 of
December 20, 2019) states
SEC. 8113….
(b) None of the funds provided in this Act for the FFG(X) Frigate program shall be used to
award a new contract that provides for the acquisition of the following components unless
those components are manufactured in the United States: Air circuit breakers;
gyrocompasses; electronic navigation chart systems; steering controls; pumps; propulsion
and machinery control systems; totally enclosed lifeboats; auxiliary equipment pumps;
shipboard cranes; auxiliary chill water systems; and propulsion propellers: Provided, That
the Secretary of the Navy shall in corporate United States manufactured propulsion engines
and propulsion reduction gears into the FFG(X) Frigate program beginning not later than
with the eleventh ship of the program.
Additional Statute and Legislation
In addition to the two above provisions, a permanent statute—10 U.S.C. 2534—requires certain
components of U.S. Navy ships to be made by a manufacturer in the national technology and
industrial base.
In addition, the paragraph in the annual DOD appropriations act that makes appropriations for the
Navy’s shipbuilding account (i.e., the Shipbuilding and Conversion, Navy, or SCN, appropriation
account) has in recent years included this proviso:
… Provided further, That none of the funds provided under this heading for the
construction or conversion of any naval vessel to be constructed in shipyards in the United
States shall be expended in foreign facilities for the construction of major components of
such vessel….
10 U.S.C. 2534 explicitly applies to certain ship components, but not others. The meaning of
“major components” in the above proviso from the annual DOD appropriations act might be
subject to interpretation.
Navy Perspective on FY2020 Legislative Provisions
Regarding the two FY2020 legislative provisions discussed above, the Navy states:
In order to comply with the law, the FFG(X) Detail Design & Construction (DD&C)
Request For Proposal (RFP) Statement of Work (SOW) was amended to include the
following requirements:
C.2.21 Manufacture of Certain Components in the United States
“Per Section 8113(b) of P.L. 116-93: Consolidated Appropriations Act, 2020, the
Contractor shall ensure that the following components are manufactured in the United
States for each FFG(X) ship: air circuit breakers; gyrocompasses; electronic navigation
chart systems; steering controls; pumps; propulsion and machinery control systems; totally
enclosed lifeboats; auxiliary equipment pumps; shipboard cranes; auxiliary chill water
systems; and propulsion propellers.”
C.2.22 Engine and Reduction Gear Study (Item 0100 only)
“The Contractor shall conduct and develop an Engine and Reduction Gear Study
(CDRL A019) documenting the impacts of incorporating United States manufactured
propulsion engines and propulsion reduction gears into the FFG(X) design starting
with the fourth, sixth, eighth, tenth, and eleventh FFG(X) ship.”
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The Navy has assessed the impact of implementing the first part of Section 8113(b) of P.L.
116-93: Consolidated Appropriations Act, 2020, which states “None of the funds provided
in this Act for the FFG(X) Frigate program shall be used to award a new contract that
provides for the acquisition of the following components unless those components are
manufactured in the United States: Air circuit breakers; gyrocompasses; electronic
navigation chart systems; steering controls; pumps; propulsion and machinery control
systems; totally enclosed lifeboats; auxiliary equipment pumps; shipboard cranes; auxiliary
chill water systems; and propulsion propellers,” for prospective shipbuilders and has
determined the impact is low. The impact of the second part of Section 8113(b) of P.L.
116-93: Consolidated Appropriations Act, 2020, which states “That the Secretary of the
Navy shall incorporate United States manufactured propulsion engines and propulsion
reduction gears into the FFG(X) Frigate program beginning not later than with the eleventh
ship of the program,” is unknown at this time. After DD&C contract award, the impact
study from the selected FFG(X) shipbuilder will be delivered to the Navy. The Navy will
use these impacts to develop the requested report to Congress no later than six months after
contract award.21
Competing Industry Teams
As shown in Table 2, four industry teams competed for the FFG-62 program. Two of the teams—
one including Fincantieri/Marinette Marine (F/MM) of Marinette, WI, and another including
General Dynamics/Bath Iron Works (GD/BIW) of Bath, ME—used European frigate designs as
their parent design. A third team—a team including Austal USA of Mobile, AL—used the Navy’s
Independence (LCS-2) class Littoral Combat Ship (LCS) design, which Austal USA currently
builds, as its parent design. A fourth team—a team including Huntington Ingalls Industries/Ingalls
Shipbuilding (HII/Ingalls) of Pascagoula, MS—has not disclosed what parent design it used.
For additional background information on the competing industry teams, see Appendix B.
Table 2. Industry Teams Reportedly Competing for FFG-62 Program
Industry team leader
Parent design
Shipyard that would build the ships
Austal USA
Independence (LCS-2) class LCS design
Austal USA of Mobile, AL
Fincantieri Marine
Italian Fincantieri FREMM (Fregata
Fincantieri/Marinette Marine (F/MM) of
Group
Europea Multi-Missione) frigate
Marinette, WI
General Dynamics/Bath
Spanish Navantia Álvaro de Bazán-class
General Dynamics/Bath Iron Works
Iron Works
F100 frigate
(GD/BIW) of Bath, ME
Huntington Ingalls
[Not disclosed]
Huntington Ingalls Industries/ Ingalls
Industries
Shipbuilding (HII/Ingalls) of Pascagoula, MS
Source: Sam LaGrone and Megan Eckstein, “Navy Picks Five Contenders for Next Generation Frigate FFG(X)
Program,” USNI News, February 16, 2018; Sam LaGrone, “Lockheed Martin Won’t Submit Freedom LCS Design
for FFG(X) Contest,” USNI News, May 28, 2019. See also David B. Larter, “Navy Awards Design Contracts for
Future Frigate,” Defense News, February 16, 2018; Lee Hudson, “Navy Awards Five Conceptual Design Contracts
for Future Frigate Competition,” Inside the Navy, February 19, 2018.
Detail Design and Construction (DD&C) Contract
The FFG-62 contract that the four industry teams competed for is a Detail Design and
Construction (DD&C) contract for up to 10 ships in the program—the lead ship plus nine option

21 Navy information paper on FFG-62 program dated March 27, 2020, provided to CRS and CBO by Navy Office of
legislative Affairs, April 14, 2020.
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ships. Under such a contract, the Navy has the option of recompeting the program after the lead
ship (if none of the nine option ships are exercised), after the 10th ship (if all nine of the option
ships are exercised), or somewhere in between (if some but not all of the nine option ships are
exercised).
As a means of reducing their procurement cost, the Navy may convert the DD&C contract into a
multiyear contract known as a block buy contract to procure the ships.22 The request for proposals
(RFP) for the DD&C contract stated: “Following contract award, the Government may designate
any or all of [the nine option ships] as part of a ‘Block Buy.’ In the event that a Block Buy is
enacted under the National Defense Authorization Act in future fiscal years, the Contractor shall
enter into negotiations with the Government to determine a fair and reasonable price for each
item under the Block Buy. The price of any ship designated as part of the Block Buy shall not
exceed the corresponding non-Block Buy price.”23

Contract Award
Under the Navy’s FY2021 budget submission, the DD&C contract was scheduled to be awarded
in July 2020. The Navy, however, moved up the date for awarding the contract and announced on
April 30, 2020, that it had awarded the FFG-62 contract to the industry team led by F/MM. The
contract award announcement states:
Marinette Marine Corp., Marinette, Wisconsin, is awarded a $795,116,483 fixed-price
incentive (firm target) contract for detail design and construction (DD&C) of the FFG(X)
class of guided-missile frigates, with additional firm-fixed-price and cost reimbursement
line items. The contract with options will provide for the delivery of up to 10 FFG(X) ships,
post-delivery availability support, engineering and class services, crew familiarization,
training equipment and provisioned item orders. If all options are exercised, the cumulative
value of this contract will be $5,576,105,441. Work will be performed at multiple locations,
including Marinette, Wisconsin (52%); Boston, Massachusetts (10%); Crozet, Virginia
(8%); New Orleans, Louisiana (7%); New York, New York (6%); Washington, D.C. (6%),
Sturgeon Bay, Wisconsin (3%), Prussia, Pennsylvania (3%), Minneapolis, Minnesota
(2%); Cincinnati, Ohio (1%); Atlanta, Georgia (1%); and Chicago, Illinois (1%). The base
contract includes the DD&C of the first FFG(X) ship and separately priced options for nine
additional ships…. Fiscal 2020 shipbuilding and conversion (Navy) funding in the amount
of $795,116,483 will be obligated at time of award and will not expire at the end of the
current fiscal year. This contract was competitively procured via the Federal Business
Opportunities website and four offers were received. The Navy conducted this competition
using a tradeoff process to determine the proposal representing the best value, based on the
evaluation of non-price factors in conjunction with price. The Navy made the best value
determination by considering the relative importance of evaluation factors as set forth in
the solicitation, where the non-price factors of design and design maturity and objective
performance (to achieve warfighting capability) were approximately equal and each more
important than remaining factors.24

22 For more on block buy contracting, see CRS Report R41909, Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition: Background and Issues for Congress
, by Ronald O'Rourke.
23 FFG(X) Guided Missile Frigate Detail Design & Construction, Solicitation Number: N0002419R2300, June 20,
2019, p. 51 of 320, accessed June 25, 2019, at https://www.fbo.gov/index?s=opportunity&mode=form&id=
d7203a2dd8010b79ef62e67ee7850083&tab=core&_cview=1.
24 Department of Defense, “Contracts For April 30, 2020,” accessed April 30, 2020, at
https://www.defense.gov/Newsroom/Contracts/Contract/Article/2171906/. See also PEO USC Public Affairs, “US
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No protests of the Navy’s FFG-62 contract award were filed during the 30-day period for filing
such protests.25
Regarding the Navy’s source-selection process for the FFG-62 competition, the Navy’s position
is that, consistent with DOD source-selection procedures, the source-selection process for the
FFG-62 competition was carefully sealed off from any potential outside influence, including
political influence; that any such influence would be highly improper; and that the Navy’s source-
selection influence reflected no such influence.26
A June 25, 2020, press report states:
In what sounded like a confession that his administration is corruptly using federal funds
to boost his re-election campaign, President Donald Trump told workers at a shipyard in
Wisconsin on Thursday that “one of the big factors” in the Navy awarding a $5.5 billion
contract to their firm was, “your location in Wisconsin, if you want to know the truth.”
The president’s startling admission came as he veered off-script during a speech to
employees of Fincantieri Marinette Marine, the firm chosen by the Navy on April 30 to
build 10 new guided-missile frigates for its FFG(X) program. The Wisconsin firm was
chosen over rivals that build ships in Alabama, Mississippi and Maine—three states that
are far less important in the electoral college.
As he read aloud a description that the frigates would be the “fastest, most advanced, and
most maneuverable combat ships anywhere on the ocean,” Trump looked up and ad-libbed:
“I hear the maneuverability is one of the big factors that you were chosen for the contract.
The other is your location in Wisconsin, if you want to know the truth.”…
The president’s remarks, which were transcribed by the White House, could be grounds
for one of the three firms that lost out on the contract—Ingalls Shipbuilding of Pascagoula,
Mississippi, Austal USA of Mobile, Alabama and Bath Iron Works of Bath, Maine—to file
a protest with the Government Accountability Office’s Procurement Law Division. As the
U.S. Naval Institute’s news site reported earlier this month, none of the firms contested the
decision during the 30-day period after the bid was accepted, which is normally when
protests are filed. But there is nothing normal about the commander-in-chief publicly
admitting that the government contracting process was corrupted by political
considerations.
A spokesperson for Ingalls declined to comment on the president’s remarks. Austal USA
and Bath Iron Works did not immediately reply to questions from The Intercept about
whether they might file a protest given this new information.
A spokesman for James Geurts, the assistant secretary of the Navy for research,
development and acquisition, who oversees more than $100 billion in spending each year,
also did not reply to a request for comment….
In another portion of the speech devoted to praising himself, Trump also claimed that he
had personally intervened in the design of the new Navy frigate. “The ships that they were
building, they looked terrible. I changed designs. I looked at it. I said, ‘That’s a terrible

Navy Awards Guided Missile Frigate (FFG(X)) Contract,” Navy News Service, April 30, 2020.
25 See, for example, Megan Eckstein, “Navy Receives No Protests Over FFG(X) Frigate Award to Fincantieri; Detail
Design Process Begins,” USNI News, June 3 (updated June 12), 2020.
26 Sources: Email exchange between CRS and Navy Office of Legislative Affairs, June 26, 2020; Navy briefing to CRS
and CBO on the FFG(X) contract award, June 19, 2020; and previous Navy briefings to CRS and CBO on the FFG-62
program.
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looking ship. Let’s make it beautiful. It’ll cost you the same, and maybe less,'” the president
told workers at the shipyard.27
Design Selected for FFG-62 Program
Figure 3 shows an artist’s rendering of F/MM’s design for FFG-62. As shown in Table 2,
F/MM’s design for FFG-62 is based on the design of Fincantieri’s FREMM (Fregata Europea
Multi-Missione) frigate, a ship that has been built in two variants, one for the Italian navy and one
for the French navy. F/MM officials state that its FFG-62 design is based on the Italian variant,
which has a length of 474.4 feet, a beam of 64.6 feet, a draft of 28.5 feet (including the bow sonar
bulb), and a displacement of 6,900 tons.28 F/MM’s FFG-62 design is slightly longer and
heavier—it has a length of 496 feet, a beam of 65 feet, a draft of 23 to 24 feet (there is no bow
sonar bulb), and an estimated displacement of 7,400 tons, or about 76% as much as the
displacement of a Flight III DDG-51 destroyer.29
Figure 3. Oliver Hazard Perry (FFG-7) Class Frigate
Artist’s rendering of F/MM design

Source: Cropped version of photograph accompanying PEO USC Public Affairs, “US Navy Awards Guided
Missile Frigate (FFG(X)) Contract,” Navy News Service, April 30, 2020.

27 Robert Mackey, “Trump Suggests Navy Sent $5 Billion to Wisconsin Firm to Help Him Win Election,” The
Intercept
, June 25, 2020. See also Marcus Weisgerber, “Trump Says Wisconsin Shipyard’s ‘Location’ Swayed Navy’s
Frigate Award,” Defense One, June 25, 2020; and White House, “Remarks by President Trump at Fincantieri Marinette
Marine | Marinette, WI,” June 25, 2020.
28 Source: Ministero Della Difesa [Ministry of Defense], “Fregate Europee Multi Missione—FREMM,” version
archived October 25, 2014, accessed May 3, 2020, at
https://web.archive.org/web/20141025045603/http://www.marina.difesa.it/conosciamoci/comandienti/log_amm/marina
lles/Pagine/FREMM.aspx.
29 Sources for length and beam: Fincantieri/Marinette Marine, “FFG(X) Guided Missile Frigate of the Future,” undated,
accessed May 3, 2020, at https://fincantierimarinegroup.com/products/navy/ffgx/. Source for draft and displacement:
Defense & Aerospace Report interview with Chuck Goddard, Senior Vice President, Fincantieri Marine Group, posted
January 26, 2020, accessed May 3, 2020, at https://www.youtube.com/watch?v=ObZzcdzIctc . The statement that the
ship’s draft is 23 to 24 feet and that its displacement is 7,400 tons is at approximately 2:35 to 2:40.
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Program Funding
Table 3 shows procurement funding for the FFG-62 program under the Navy’s FY2021 budget
submission.
Table 3. FFG-62 Program Procurement Funding
Millions of then-year dollars, rounded to nearest tenth.

FY21
FY22
FY23
FY24
FY25
Funding
1,053.1
954.5
1,865.9
1,868.8
2,817.3
(Quantity)
(1)
(1)
(2)
(2)
(3)
Avg. unit cost
1,053.1
954.5
933.0
934.4
939.1
Source: Table prepared by CRS based on Navy FY2021 budget submission.
Issues for Congress
Potential Impact of COVID-19 Situation
One issue for Congress concerns the potential impact of the COVID-19 situation on the execution
of U.S. military shipbuilding programs, including the FFG-62 program. A May 1, 2020, press
report states that James Geurts, the Assistant Secretary of the Navy for Research Development,
and Acquisition (i.e., the Navy’s acquisition executive),
said he does not expect the COVID-19 pandemic to affect the newly awarded FFG(X)
frigate program to Fincantieri’s Marinette Marine. “I don’t expect it to slow down the
program…knowing what I know about COVID and the impact. You know the first year or
two of this will be in detail design, engineering level work. We’ve proven across all our
shipyards an ability to keep a high percentage of design work going on schedule and high
percentage of the workforce on track there.” He said that unlike how the industrial
operations are being affected in some shipyards this level of design work should not be
sensitive to the pandemic. “I don’t see that as a risk to this program because of the phasing
that industrial operations and construction won’t start for a little while, another two years
down the road,” he added.30
For additional discussion of the potential impact of the COVID-19 situation on the execution of
U.S. military shipbuilding programs, see CRS Report RL32665, Navy Force Structure and
Shipbuilding Plans: Background and Issues for Congress
, by Ronald O'Rourke.
Accuracy of Navy’s Estimated Unit Procurement Cost
Another potential issue for Congress concerns the accuracy of the Navy’s estimated unit
procurement cost for the FFG-62, particularly when compared to the known unit procurement
costs of other recent U.S. surface combatants. As detailed by CBO31 and GAO,32 lead ships in
Navy shipbuilding programs in many cases have turned out to be more expensive to build than

30 Item entitled “FFG(X) COVID” within DDN Staff, “Defense Watch: COVID Delays, DDG-1002, SASC Hearings,
OPC,” Defense Daily, May 1, 2020.
31 See Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2019 Shipbuilding Plan, October 2018, p.
25, including Figure 10.
32 See Government Accountability Office, Navy Shipbuilding[:] Past Performance Provides Valuable Lessons for
Future Investments
, GAO-18-238SP, June 2018, p. 8.
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the Navy had estimated. If the lead ship in a shipbuilding program turns out to be intrinsically
more expensive to build than the Navy estimated, the follow-on ships in the program will likely
also be more expensive to build than the Navy estimated.
As discussed earlier, the Navy’s FY2021 budget submission estimates that the third and
subsequent ships in the FFG-62 program will cost roughly $940 million each in then-year dollars
to procure. This equates to a cost of about $127 million per thousand tons of full load
displacement, a figure that is
 about 36% less than the cost per thousand tons of full load displacement of the
Flight III DDG-51;
 about 15% less than the cost per thousand tons of full load displacement of the
Freedom (LCS-1) variant of the Littoral Combat Ship (LCS) that F/MM currently
builds; and
 about 15% less than the cost per thousand tons of full load displacement of the
Coast Guard’s National Security Cutter (NSC).33
Put another way, the FFG-62 has
 an estimated full load displacement that is about 76% as great as that of the
Flight III DDG-51, and an estimated unit procurement cost that is about 49% as
great as that of the Flight III DDG-51;
 an estimated full load displacement that is about 120% greater than that of the
LCS-1 variant of the LCS, and an estimated unit procurement cost that is about
80% greater than that of the LCS-1 variant of the LCS; and
 an estimated full load displacement that is about 64% greater than that of the
Coast Guard’s National Security Cutter (NSC), and an estimated unit
procurement cost that is about 40% greater than that of the NSC.34
Ships of the same general type and complexity that are built under similar production conditions
tend to have similar costs per weight and consequently unit procurement costs that are more or
less proportional to their displacements. Setting the estimated cost per thousand tons of
displacement of the FFG-62 about equal to those of the LCS-1 variant of the LCS or the NSC
would increase the estimated unit procurement cost of the third and subsequent FFG-62s from the
Navy’s estimate of about $940 million to an adjusted figure of about $1,100 million, an increase
of about 17%. Setting the estimated cost per thousand tons of displacement of the FFG-62 about
equal to that of the Flight III DDG-51 would increase the estimated unit procurement cost of the
third and subsequent FFG-62s from the Navy’s estimate of about $940 million to an adjusted
figure of about $1,470 million, an increase of about 56%.
Potential oversight questions for Congress include the following:
 What is the Navy’s basis for its view that the FFG-62—a ship about three-
quarters as large as the Flight III DDG-51, and with installed capabilities that are
in many cases similar to those of the DDG-51—can be procured for about one-
half the cost of the Flight III DDG-51?

33 For more on the NSC program, see CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues
for Congress
, by Ronald O'Rourke.
34 Source: CRS analysis of full load displacements and unit procurement costs of FFG-62, Flight III DDG-51, LCS-1
variant of the LCS, and the NSC.
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 DDG-51s are procured using multiyear procurement (MYP), which reduces their
procurement cost by several percent, while the FFG-62 DD&C contract is a
contract with options, which operates as a form of annual contracting and
consequently does not achieve the kinds of savings that are possible with an
MYP contract.35 Would adjusting for this difference by assuming the use of
annual contracting for procuring DDG-51s mean that the difference between the
Flight III DDG-51 and the FFG-62 in cost per thousand tons displacement, other
things held equal, is greater than the figure of 36% shown above?
 What is the Navy’s basis for its view that the FFG-62—a ship with a full
collection of permanently installed combat system equipment—can be procured
for a cost per thousand tons of full load displacement that is about 15% less than
that of the LCS-1 variant of the LCS, a ship built by the same shipyard that
features only a partial collection of permanently installed combat system
equipment?36
 What is the Navy’s basis for its view that the FFG-62—a ship built to Navy
combat survivability standards and featuring a full collection of installed Navy
combat system equipment—can be procured for a cost per thousand tons of full
load displacement that is 15% less than that of the NSC, a ship built to a Coast
Guard rather than Navy combat-survivability standard and featuring a more-
modest collection of combat system equipment?
 To what degree can differences in costs for building ships at F/MM compared to
costs for building ships at the shipyards that build DDG-51s and NSCs account
for the FFG-62’s lower estimated cost per thousand tons displacement?
 To what degree can the larger size of the FFG-62 compared to the LCS-1 variant
of the LCS or the NSC account for the FFG-62’s lower estimated cost per
thousand tons displacement?
 To what degree will process improvements at F/MM, beyond those that were in
place for building LCSs, permit FFG-62s to be built at the Navy’s estimated cost
per thousand tons?
 How much might the cost of building FFG-62s be reduced by converting the
FFG-62 contract into a block buy contract (i.e., a multiyear contract)?
Regarding the Navy’s estimated cost for procuring FFG-62s, an August 2019 Government
Accountability Office (GAO) report on the FFG-62 program states:
The Navy undertook a conceptual design phase for the FFG(X) Guided Missile Frigate
program that enabled industry to inform FFG(X) requirements, identify opportunities for
cost savings, and mature different ship designs. The Navy also streamlined the FFG(X)
acquisition approach in an effort to accelerate the timeline for delivering the ships to the
fleet…. [H]owever, the Navy has requested funding for the FFG(X) lead ship even though
it has yet to complete key cost estimation activities, such as an independent cost estimate,

35 For additional discussion of the savings that are possible with MYP contracts, see CRS Report R41909, Multiyear
Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress
, by
Ronald O'Rourke.
36 Some of the combat system equipment of a deployed LCS consists of a modular mission package is not permanently
built into the ship. These modular mission packages are procured separately from the ship, and their procurement costs
are not included in the unit procurement costs of LCSs. For additional discussion, see CRS Report RL33741, Navy
Littoral Combat Ship (LCS) Program: Background and Issues for Congress
, by Ronald O'Rourke.
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to validate the credibility of cost expectations. Department of Defense (DOD) cost
estimators told GAO the timeline for completing the independent cost estimate is uncertain.
Specifically, they stated that this estimate will not be finalized until the Navy
communicates to them which FFG(X) design is expected to receive the contract award.
GAO-identified best practices call for requisite cost knowledge to be available to inform
resource decisions and contract awards.37
An October 2019 Congressional Budget Office (CBO) report on the cost of the Navy’s
shipbuilding programs stated the following about the FFG-62 (emphasis added):
The four shipbuilders in the [FFG(X)] competition are using existing designs that have
displacements of between 3,000 tons and almost 7,000 tons.
The Navy’s cost goal for the program is currently set at $1.2 billion for the first ship of the
class and an average cost of $800 million to $950 million for the remaining 19 ships.
Because the 2020 shipbuilding plan estimates an average cost of slightly more than $850
million each for all 20 ships—an amount near the lower end of the Navy’s cost goal—
actual costs would probably exceed the estimates. Historically, the costs of lead ships have
grown by 27 percent, on average, over the Navy’s initial estimates…. Taking into account
all publicly available information, CBO’s estimate reflects an assumption that the
FFG(X) would displace about 4,700 tons
, or the median point of the four proposed ship
designs in competition for the program contract. As a result, CBO estimates the average
cost of the FFG(X)s at $1.2 billion each, for a total cost of $23 billion, compared with the
Navy’s estimate of $17 billion. Uncertainty about the frigate design makes that estimate
difficult to determine.38
Number of FFG-62s to Procure in FY2021
Another issue for Congress is whether to fund the procurement in FY2021 of one FFG-62 (the
Navy’s request), no FFG-62, or two FFG-62s.
Supporters of procuring no FFG-62 in FY2021 could argue that traditionally there has often been
a so-called gap year in Navy shipbuilding programs—a year of no procurement between the year
that the lead ship is procured and the year that the second ship is procured. This gap year, they
could argue, is intended to provide some time to discover through the ship’s construction process
problems in the ship’s design that did not come to light during the design process, and fix those
problems before they are built into one or more follow-on ships in the class. Given the Navy’s
experience with its previous small surface combatant shipbuilding program—the Littoral Combat
Ship (LCS) program—they could argue, inserting a gap year into the FFG-62’s procurement
profile would be prudent.
Supporters of procuring one FFG-62 in FY2021 (rather than none) could argue that although
including a gap year is a traditional practice in Navy shipbuilding programs, it has not always
been used; that the era of computer-aided ship design (compared to the earlier era of paper
designs) has reduced the need for gap years; that the need for a gap year in the FFG-62 program
is further reduced by the program’s use of a parent design rather than a clean-sheet design; and
that a gap year can increase the cost of the second and subsequent ships in the program by
causing an interruption in the production learning curve and a consequent loss of learning at the
shipyard and supplier firms in moving from production of the first ship to the second. Supporters
of procuring one FFG-62 (rather than two) could argue that immediately moving from one ship in

37 Government Accountability Office, Guide Missile Frigate[:] Navy Has Taken Steps to Reduce Acquisition Risk, but
Opportunities Exist to Improve Knowledge for Decision Makers
, GAO-19-512, August 2019, summary page.
38 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2020 Shipbuilding Plan, October 2019,
pp. 252-26.
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FY2020 to two ships in FY2021 could cause strains at the shipyard and thereby increase program
risks, particularly given the challenges that shipyards have often encountered in building the first
ship in a shipbuilding program, and that the funding needed for the procurement of a second
FFG-62 in FY2021 could be better spent on other Navy program priorities.
Supporters of procuring two FFG-62s in FY2021 could argue that the Navy’s FY2020
shipbuilding plan (see Table 1) called for procuring two FFG-62s in FY2021; that procuring one
FFG-62 rather than two in FY2021 reduces production economies of scale in the FFG-62
program at the shipyard and supplier firms, thereby increasing unit procurement costs; and that
procuring two FFG-62s rather than one in FY2021 would help close more quickly the Navy’s
large percentage shortfall in small surface combatants relative to the Navy’s force-level goal for
such ships.
Number of FFG-62 Builders
Another issue for Congress is whether to build FFG-62s at a single shipyard (the Navy’s baseline
plan), or at two or three shipyards. The Navy’s FFG-7 class frigates, which were procured at
annual rates of as high as eight ships per year, were built at three shipyards.
In considering whether to build FFG-62s at a single shipyard (the Navy’s baseline plan), or at two
or three shipyards, Congress may consider several factors, including but not limited to the annual
FFG-62 procurement rate, shipyard production capacities and production economies of scale, the
potential costs and benefits in the FFG-62 program of employing recurring competition between
multiple shipyards, and how the number of FFG-62 builders might fit into a larger situation
involving the production of other Navy and Coast Guard ships, including Navy DDG-51
destroyers, Navy amphibious ships, Coast Guard National Security Cutters (NSCs), and Coast
Guard Offshore Patrol Cutters (OPCs).39
U.S. Content Requirements
Another issue for Congress is whether to take any further legislative action regarding U.S. content
requirements for FFG-62s. Potential options include amending, repealing, or replacing one or
both of the two previously mentioned U.S. content provisions for the FFG-62 program that
Congress passed in FY2020, passing a new, separate provision of some kind, or doing none of
these things.
In considering whether to take any further legislative action on the issue, Congress may consider
several factors, including the potential impacts of the two U.S. content provisions that Congress
passed in FY2020. Some observers view these two provisions as being in tension with one
another.40 In instances where differences between two enacted laws might need to be resolved,
one traditional yardstick is to identify the legislation that was enacted later, on the grounds that it
represents the final or most-recent word of the Congress on the issue. Although FY2020 National
Defense Authorization Act and the FY2020 DOD Appropriations Act were signed into law on the
same day (December 20, 2019), the P.L. numbers assigned to the two laws appear to indicate that

39 For more on the DDG-51 program, see CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs:
Background and Issues for Congress
, by Ronald O'Rourke. For more on Navy amphibious shipbuilding programs, see
CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for
Congress
, by Ronald O'Rourke. For more on the NSC and OPC programs, see CRS Report R42567, Coast Guard
Cutter Procurement: Background and Issues for Congress
, by Ronald O'Rourke.
40 See, for example, Ben Werner and Sam LaGrone, “FY 2020 Defense Measures Almost Law; Bills Contain
Conflicting Language on FFG(X),” USNI News, December 20, 2019.
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the FY2020 DOD Appropriations Act was enacted later than the FY2020 National Defense
Authorization Act. It can also be noted that Section 8113(b) of the FY2020 DOD Appropriations
Act is a provision relating to the use of FY2020 funds, while Section 856 of the FY2020 National
Defense Authorization Act refers to amounts authorized without reference to a specific fiscal year.
Required Capabilities and Growth Margin
Another issue for Congress is whether the Navy has appropriately defined the required
capabilities and growth margin of the FFG-62.
Analytical Basis for Desired Ship Capabilities
One aspect of this issue is whether the Navy has an adequately rigorous analytical basis for its
identification of the capability gaps or mission needs to be met by the FFG-62, and for its
decision to meet those capability gaps or mission needs through the procurement of a FFG with
the capabilities outlined earlier in this CRS report. The question of whether the Navy has an
adequately rigorous analytical basis for these things was discussed in greater detail in earlier
editions of this CRS report.41
Number of VLS Tubes
Another potential aspect of this issue concerns the planned number of Vertical Launch System
(VLS) missile tubes on the FFG-62. The VLS is the FFG-62’s principal (though not only) means
of storing and launching missiles. As shown in Figure 2 (see the box in the upper-left corner
labeled “AW,” meaning air warfare), the FFG-62 is to be equipped with 32 Mark 41 VLS tubes.
(The Mark 41 is the Navy’s standard VLS design.)
Supporters of requiring the FFG-62 to be equipped with a larger number of VLS tubes, such as
48, might argue that the FFG-62 is to be roughly half as expensive to procure as the DDG-51
destroyer, and might therefore be more appropriately equipped with 48 VLS tubes, which is one-
half the number on recent DDG-51s. They might also argue that in a context of renewed great
power competition with potential adversaries such as China, which is steadily improving its naval
capabilities,42 it might be prudent to equip the FFG-62s with 48 rather than 32 VLS tubes, and
that doing so might only marginally increase the unit procurement cost of the FFG-62.
Supporters of requiring the FFG-62 to have no more than 32 VLS tubes might argue that the
analyses indicating a need for 32 already took improving adversary capabilities (as well as other
U.S. Navy capabilities) into account. They might also argue that F/MM’s design for the FFG-62,
in addition to having 32 VLS tubes, will also to have separate, deck-mounted box launchers for
launching 16 anti-ship cruise missiles, as well as a separate, 21-cell Rolling Airframe Missile
(RAM) AAW missile launcher; that the Navy plans to deploy additional VLS tubes on its planned
Large Unmanned Surface Vehicles (LUSVs), which are to act as adjunct weapon magazines for
the Navy’s manned surface combatants;43 and that increasing the number of VLS tubes on the
FFG-62 from 32 to 48 would increase (even if only marginally) the procurement cost of a ship
that is intended to be an affordable supplement to the Navy’s cruisers and destroyers.

41 See, for example, the version of this report dated February 4, 2019.
42 For more on China’s naval modernization effort, see CRS Report RL33153, China Naval Modernization:
Implications for U.S. Navy Capabilities—Background and Issues for Congress
, by Ronald O'Rourke.
43 For additional discussion, see CRS Report R45757, Navy Large Unmanned Surface and Undersea Vehicles:
Background and Issues for Congress
, by Ronald O'Rourke.
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A May 14, 2019, Navy information paper on expanding the cost impact of expanding the FFG-62
VLS capacity from 32 cells to 48 cells states
To grow from a 32 Cell VLS to a 48 Cell VLS necessitates an increase in the length of the
ship with a small beam increase and roughly a 200-ton increase in full load displacement.
This will require a resizing of the ship, readdressing stability and seakeeping analyses, and
adapting ship services to accommodate the additional 16 VLS cells.
A change of this nature would unnecessarily delay detail design by causing significant
disruption to ship designs. Particularly the smaller ship designs. Potential competitors have
already completed their Conceptual Designs and are entering the Detail Design and
Construction competition with ship designs set to accommodate 32 cells.
The cost is estimated to increase between $16M [million] and $24M [million] per ship.
This includes ship impacts and additional VLS cells.44
Compared to an FFG-62 follow-on ship unit procurement cost of about $900 million, the above
estimated increase of $16 million to $24 million would equate to an increase in unit procurement
cost of about 1.8% to about 2.7%.
Growth Margin
Another potential aspect of this issue is whether the Navy more generally has chosen the
appropriate amount of growth margin to incorporate into the FFG-62 design. As shown in the
Appendix A, the Navy wants the FFG-62 design to have a growth margin (also called service life
allowance) of 5%, meaning an ability to accommodate upgrades and other changes that might be
made to the ship’s design over the course of its service life that could require up to 5% more
space, weight, electrical power, or equipment cooling capacity. As shown in the Appendix A, the
Navy also wants the FFG-62 design to have an additional growth margin (above the 5% factor)
for accommodating a future directed energy system (i.e., a laser or high-power microwave
device) or an active electronic attack system (i.e., electronic warfare system).
Supporters could argue that a 5% growth margin is traditional for a ship like a frigate, that the
FFG-62’s 5% growth margin is supplemented by the additional growth margin for a directed
energy system or active electronic attack system, and that requiring a larger growth margin could
make the FFG-62 design larger and more expensive to procure.
Skeptics might argue that a larger growth margin (such as 10%—a figure used in designing
cruisers and destroyers) would provide more of a hedge against the possibility of greater-than-
anticipated improvements in the capabilities of potential adversaries such as China, that a limited
growth margin was a concern in the FFG-7 design,45 and that increasing the FFG-62 growth
margin from 5% to 10% would have only a limited impact on the FFG-62’s procurement cost.
A potential oversight question for Congress might be: What would be the estimated increase in
unit procurement cost of the FFG-62 of increasing the ship’s growth margin from 5% to 10%?

44 Navy information paper entitled “FFG(X) Cost to Grow to 48 cell VLS,” dated May 14, 2019, received from Navy
Office of Legislative Affairs on June 14, 2019.
45 See, for example, See U.S. General Accounting Office, Statement of Jerome H. Stolarow, Director, Procurement and
Systems Acquisition Division, before the Subcommittee on Priorities and Economy in Government, Joint Economic
Committee on The Navy’s FFG-7 Class Frigate Shipbuilding Program, and Other Ship Program Issues, January 3,
1979, pp. 9-11.
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Technical Risk
Another potential oversight issue for Congress concerns technical risk in the FFG-62 program.
The Navy can argue that the program’s technical risk has been reduced by use of the parent-
design approach and the decision to use only systems and technologies that already exist or are
already being developed for use in other programs, rather than new technologies that need to be
developed. Skeptics, while acknowledging that point, might argue that lead ships in Navy
shipbuilding programs inherently pose technical risk, because they serve as the prototypes for
their programs.
June 2020 GAO Report
A June 2020 GAO report on the status of various DOD acquisition programs states the following
about the FFG-62 program:
Technology Maturity
The Navy completed a technology readiness assessment for FFG(X) in March 2019. The
assessment, which Navy officials said included a review of about 150 systems, identified
no critical technology elements that pose major technological risk during development.
DOD has yet to complete an independent technical risk assessment for FFG(X). An official
from the Office of the Under Secretary of Defense for Research and Engineering who is
participating in the FFG(X) risk assessment said that delays in obtaining required
information from the Navy make it unlikely the assessment will be completed before the
program’s development start decision. If incomplete, information available to inform
decision makers on the sufficiency of the Navy’s efforts to account for technical risk factors
will be diminished.
The FFG(X) design approach includes the use of many existing combat and mission
systems to reduce technical risk. However, one key system—the Enterprise Air
Surveillance Radar (EASR)—is still in development by another program. EASR, which is
a scaled down version of the Navy Air and Missile Defense Radar program’s AN/SPY-
6(V)1 radar currently in production, is expected to provide long-range detection and
engagement of advanced threats. The Navy is currently conducting land-based testing on
an EASR advanced prototype, with FFG(X)-specific testing planned to begin in 2022. The
Navy also expects to integrate versions of the radar on other ship classes beginning in 2021,
which may reduce integration risk for FFG(X) if the Navy is able to incorporate lessons
learned from integration on other ships during FFG(X) detail design activities.
Design Stability
The Navy used the results from an FFG(X) conceptual design phase to inform the
program’s May 2019 preliminary design review as well as the ongoing contract award
process for detail design and construction of the lead ship. In early 2018, the Navy
competitively awarded FFG(X) conceptual design contracts to five industry teams.
Conceptual design was intended to enable industry to mature parent ship designs for
FFG(X)—designs based on ships that have been built and demonstrated at sea—as well as
inform requirements and identify opportunities for cost savings. Navy officials said the
specific plan for detail design will be determined based on the winning proposal.
Software and Cybersecurity
According to the FFG(X) acquisition strategy, the program is structured to provide mission
systems and associated software to the shipbuilder as government-furnished equipment.
These systems, which are provided by other Navy programs, include a new version of the
Aegis Weapon System—FFG(X)’s combat management system—to coordinate radar and
weapon system interactions from threat detection to target strike. Navy officials said
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FFG(X)’s Aegis Weapon System will leverage at least 90 percent of its software from the
Aegis common source software that supports combat systems found on other Navy ships,
such as the DDG 51-class destroyers.
The Navy approved the FFG(X) cybersecurity strategy in March 2019. The strategy states
the program’s cyber survivability requirement was a large driver in the development of
network architecture. The Navy’s strategy also emphasizes the importance of the ability of
the ship to operate in a cyber-contested environment. The Navy will consider cybersecurity
for the systems provided by the shipbuilder—which control electricity, machinery, damage
control, and other related systems—as part of selecting the FFG(X) design.
Other Program Issues
In October 2019, DOD confirmed that the Navy did not request that prospective
shipbuilders include warranty pricing to correct defects after ship deliveries in their
proposals for the competitive FFG(X) detail design and construction contract award, as we
previously recommended. Instead, the Navy required that the proposals include guaranty
pricing with limited liability of at least $5 million to correct defects, which could allow for
a better value to the government than has been typical for recent shipbuilding programs.
However, warranty pricing could have provided the Navy with complete information on
the cost-effectiveness of a warranty versus a guaranty. Our prior work has found that using
comprehensive ship warranties instead of guarantees could reduce the Navy’s financial
responsibility for correcting defects and foster quality performance by linking the
shipbuilder’s cost to correct deficiencies to its profit.
Program Office Comments
We provided a draft of this assessment to the program office for review and comment. The
program office provided technical comments, which we incorporated where appropriate.
The program office stated that the Navy is working to satisfy the requirement for an
independent technical risk assessment requirement prior to development start. Regarding
warranties, the program office stated the solicitation allows shipbuilders to propose a limit
of liability beyond the $5 million requirement. It said this arrangement represents an
appropriate balance between price and risk; ensures that the shipbuilder is accountable for
the correction of defects that follow acceptance; and allows shipbuilders to use their own
judgment in proposing the value of the limit of liability. The program office also said the
Navy will evaluate the extent to which any additional liability amount proposed above the
minimum requirement provides a meaningful benefit to the government, and will evaluate
favorably a higher proposed limitation of liability value, up to an unlimited guaranty.46
Guaranty vs. Warranty in Construction Contract
Another aspect of this issue concerns the Navy’s use of a guaranty rather than a warranty in the
Detail Design and Construction (DD&C) contract for the FFG-62 program. An August 2019 GAO
report on the FFG-62 program states
The Navy plans to use a fixed-price incentive contract for FFG(X) detail design and
construction. This is a notable departure from prior Navy surface combatant programs that
used higher-risk cost-reimbursement contracts for lead ship construction. The Navy also
plans to require that each ship has a minimum guaranty of $5 million to correct shipbuilder-
responsible defects identified in the 18 months following ship delivery. However, Navy
officials discounted the potential use of a warranty—another mechanism to address the
correction of shipbuilder defects—stating that their use could negatively affect
shipbuilding cost and reduce competition for the contract award. The Navy provided no

46 Government Accountability Office, Defense Acquisitions Annual Assessment[:] Drive to Deliver Capabilities Faster
Increases Importance of Program Knowledge and Consistent Data for Oversight
GAO-20-439, p. 124.
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analysis to support these claims and has not demonstrated why the use of warranties is not
a viable option. The Navy’s planned use of guarantees helps ensure the FFG(X) shipbuilder
is responsible for correcting defects up to a point, but guarantees generally do not provide
the same level of coverage as warranties. GAO found in March 2016 that the use of a
guaranty did not help improve cost or quality outcomes for the ships reviewed. GAO also
found the use of a warranty in commercial shipbuilding and certain Coast Guard ships
improves cost and quality outcomes by requiring the shipbuilders to pay to repair defects.
The FFG(X) request for proposal offers the Navy an opportunity to solicit pricing for a
warranty to assess the cost-effectiveness of the different mechanisms to address ship
defects.47
As discussed in another CRS report,48 in discussions of Navy (and also Coast Guard)
shipbuilding, a question that sometimes arises is whether including a warranty in a shipbuilding
contract is preferable to not including one. The question can arise, for example, in connection
with a GAO finding that “the Navy structures shipbuilding contracts so that it pays shipbuilders
to build ships as part of the construction process and then pays the same shipbuilders a second
time to repair the ship when construction defects are discovered.”49
Including a warranty in a shipbuilding contract (or a contract for building some other kind of
defense end item), while potentially valuable, might not always be preferable to not including
one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism
of an acquisition program to state that it is using a contract that does not include a warranty (or a
weaker form of a warranty rather than a stronger one).
Including a warranty generally shifts to the contractor the risk of having to pay for fixing
problems with earlier work. Although that in itself could be deemed desirable from the
government’s standpoint, a contractor negotiating a contract that will have a warranty will
incorporate that risk into its price, and depending on how much the contractor might charge for
doing that, it is possible that the government could wind up paying more in total for acquiring the
item (including fixing problems with earlier work on that item) than it would have under a
contract without a warranty.
When a warranty is not included in the contract and the government pays later on to fix problems
with earlier work, those payments can be very visible, which can invite critical comments from
observers. But that does not mean that including a warranty in the contract somehow frees the
government from paying to fix problems with earlier work. In a contract that includes a warranty,
the government will indeed pay something to fix problems with earlier work—but it will make
the payment in the less-visible (but still very real) form of the up-front charge for including the
warranty, and that charge might be more than what it would have cost the government, under a
contract without a warranty, to pay later on for fixing those problems.
From a cost standpoint, including a warranty in the contract might or might not be preferable,
depending on the risk that there will be problems with earlier work that need fixing, the potential
cost of fixing such problems, and the cost of including the warranty in the contract. The point is

47 Government Accountability Office, Guide Missile Frigate[:] Navy Has Taken Steps to Reduce Acquisition Risk, but
Opportunities Exist to Improve Knowledge for Decision Makers
, GAO-19-512, August 2019, summary page.
48 See CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke.
49 See Government Accountability Office, Navy Shipbuilding[:] Past Performance Provides Valuable Lessons for
Future Investments
, GAO-18-238SP, June 2018, p. 21. A graphic on page 21 shows a GAO finding that the
government was financially responsible for shipbuilder deficiencies in 96% of the cases examined by GAO, and that
the shipbuilder was financially responsible for shipbuilder deficiencies in 4% of the cases.
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that the goal of avoiding highly visible payments for fixing problems with earlier work and the
goal of minimizing the cost to the government of fixing problems with earlier work are separate
and different goals, and that pursuing the first goal can sometimes work against achieving the
second goal.50
DOD’s guide on the use of warranties states the following:
Federal Acquisition Regulation (FAR) 46.7 states that “the use of warranties is not
mandatory.” However, if the benefits to be derived from the warranty are commensurate
with the cost of the warranty, the CO [contracting officer] should consider placing it in the
contract. In determining whether a warranty is appropriate for a specific acquisition, FAR
Subpart 46.703 requires the CO to consider the nature and use of the supplies and services,
the cost, the administration and enforcement, trade practices, and reduced requirements.
The rationale for using a warranty should be documented in the contract file....
In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure
the life cycle costs of the system with and without the warranty. A CBA is required to
determine if the warranty will be cost beneficial. CBA is an economic analysis, which
basically compares the Life Cycle Costs (LCC) of the system with and without the warranty
to determine if warranty coverage will improve the LCCs. In general, five key factors will
drive the results of the CBA: cost of the warranty + cost of warranty administration +
compatibility with total program efforts + cost of overlap with Contractor support +
intangible
savings.
Effective
warranties
integrate
reliability,
maintainability,
supportability, availability, and life-cycle costs. Decision factors that must be evaluated
include the state of the weapon system technology, the size of the warranted population,
the likelihood that field performance requirements can be achieved, and the warranty
period of performance.51
In response to a draft version of GAO’s August 2019 report, the Navy stated
As a part of the planning for the procurement of detail design and construction for FFG(X),
the Navy determined that a guaranty, rather than a commercial-type warranty, will be
implemented for the program. As a part of the FFG(X) detail design and construction
request for proposals [RFP] released on June 20, 2019, the Navy asked contractors to
include a limit of liability of at least $5 million per ship and a guaranty period of 18 months
beyond preliminary acceptance of each ship. Further, the solicitation allows offerors to
propose as additional limit of liability amount beyond the required $5 million amount, up
to and including an unlimited liability. This arrangement represents an appropriate balance
between price considerations and risks, ensuring that the shipbuilder is accountable for the
correction of defects that follow preliminary acceptance, while allowing each shipbuilder
to use its own business judgement in proposing the value of the limit of liability. The Navy
released the solicitation prior to this GAO recommendation and is unable to modify the
current solicitation because it would cause an unacceptable delay to the FFG(X) program.

50 It can also be noted that the country’s two largest builders of Navy ships—General Dynamics (GD) and Huntington
Ingalls Industries (HII)—derive about 60% and 96%, respectively, of their revenues from U.S. government work. (See
General Dynamics, 2016 Annual Report, page 9 of Form 10-K [PDF page 15 of 88]) and Huntington Ingalls Industries,
2016 Annual Report, page 5 of Form 10-K [PDF page 19 of 134]). These two shipbuilders operate the only U.S.
shipyards currently capable of building several major types of Navy ships, including submarines, aircraft carriers, large
surface combatants, and amphibious ships. Thus, even if a warranty in a shipbuilding contract with one of these firms
were to somehow mean that the government did not have pay under the terms of that contract—either up front or later
on—for fixing problems with earlier work done under that contract, there would still be a question as to whether the
government would nevertheless wind up eventually paying much of that cost as part of the price of one or more future
contracts the government may have that firm.
51 Department of Defense, Department of Defense Warranty Guide, Version 1.0, September 2009, accessed July 13,
2017, at https://www.acq.osd.mil/dpap/pdi/uid/docs/departmentofdefensewarrantyguide[1].doc.
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To support the GAO recommendation to request pricing for an unlimited warranty, the
Navy will request pricing for unlimited warranty before exercising the first ship option and
evaluate the business case.52
Potential Industrial-Base Impacts of FFG-62 Program
Another issue for Congress concerns the potential industrial-base impacts of the FFG-62 program
for shipyards and supplier firms in the context of other Navy and Coast Guard shipbuilding
programs, including the Navy’s Littoral Combat Ship (LCS), DDG-51 destroyer, and amphibious
shipbuilding programs, and the Coast Guard’s National Security Cutter (NSC) and Offshore
Patrol Cutter (OPC) programs.
Two of the teams that competed for the FFG-62 program involved shipyards (F/MM and Austal
USA) that are currently building LCSs, procurement of which ended in FY2019. With the FFG-
62 contract having been awarded to F/MM, Austal USA and its associated supplier firms could
face a downturn in workloads and employment levels as they work off their backlog of LCS-
related work if this work is not replaced by work associated with building other Navy or Coast
Guard ships.
The two other teams that competed for the FFG-62 program involved shipyards (GD/BIW and
HII/Ingalls) that currently build DDG-51 destroyers and (in the case of HII/Ingalls) Navy
amphibious ships. As discussed in the CRS report on the DDG-51 program, the Navy’s FY2021
budget submission shows a programmed reduction in the DDG-51 procurement rate starting in
FY2023, perhaps as a reflection of a potential change in the surface combatant force
architecture.53 A potential change in the Navy’s amphibious ship force architecture might impact
the types and quantities of amphibious ships being procured for the Navy.54 Other things held
equal, these two shipyards and their associated supplier firms could face a downturn in workloads
and employment levels if the level of DDG-51-related work and (for HII/Ingalls) amphibious-
ship-related work is reduced and not replaced by work associated with building other Navy or
Coast Guard ships.
Legislative Activity for FY2021
Summary of Congressional Action on FY2021 Funding Request
Table 4
summarizes congressional action on the Navy’s FY2021 funding request for the LCS
program.

52 Government Accountability Office, Guide Missile Frigate[:] Navy Has Taken Steps to Reduce Acquisition Risk, but
Opportunities Exist to Improve Knowledge for Decision Makers
, GAO-19-512, August 2019 (revised September 5,
2019 to include an omitted page in the report section, [and] comments from the Department of Defense), pp. 44-45.
53 See CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for
Congress
, by Ronald O'Rourke.
54 See CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for
Congress
, by Ronald O'Rourke.
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Table 4. Congressional Action on FY2021 Procurement Funding Request
Millions of dollars, rounded to nearest tenth.


Authorization
Appropriation

Request
HASC
SASC
Conf.
HAC
SAC
Conf.
Funding
1,053.1
954.5
1,053.1

1,053.1


(Procurement quantity)
(1)
(1)
(1)

(1)


Source: Table prepared by CRS based on FY2021 Navy budget submission, committee and conference reports,
and explanatory statements on the FY2021 National Defense Authorization Act and the FY2021 DOD
Appropriations Act.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee; HAC is
House Appropriations Committee; SAC is Senate Appropriations Committee; Conf. is conference agreement.
FY2021 National Defense Authorization Act (H.R. 6395/S. 4049)
House
The House Armed Services Committee, in its report (H.Rept. 116-442 of July 9, 2020) on H.R.
6395, recommended the funding level shown in the HASC column of Table 4. The recommended
reduction of $98.6 million in procurement funding is for “Anticipated learning curve.” (Page 345)
Section 111 of H.R. 6395 as reported by the committee states:
SEC. 111. INDEPENDENT COST ESTIMATE OF FFG(X) FRIGATE PROGRAM.
In accordance with section 2334(b) of title 10, United States Code, the Secretary of Defense
shall ensure that an independent cost estimate of the full life-cycle cost of the FFG(X)
frigate program of the Navy has been completed before the conclusion of milestone B of
such program.
Senate
The Senate Armed Services Committee, in its report (S.Rept. 116-236 of June 24, 2020) on S.
4049, recommended the funding level shown in the SASC column of Table 4.
Section 1025 of S. 4049 as reported by the committee states (emphasis added):
SEC. 1025. SENSE OF CONGRESS ON ACTIONS NECESSARY TO ACHIEVE A 355-
SHIP NAVY.
It is the sense of Congress that to achieve the national policy of the United States to have
available, as soon as practicable, not fewer than 355 battle force ships—
(1) the Navy must be adequately resourced to increase the size of the Navy in accordance
with the national policy, which includes the associated ships, aircraft, personnel,
sustainment, and munitions;
(2) across fiscal years 2021 through 2025, the Navy should start construction on not
fewer than

(A) 12 Arleigh Burke-class destroyers;
(B) 10 Virginia-class submarines;
(C) 2 Columbia-class submarines;
(D) 3 San Antonio-class amphibious ships;
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(E) 1 LHA-class amphibious ship;
(F) 6 John Lewis-class fleet oilers; and
(G) 5 guided missile frigates;
(3) new guided missile frigate construction should increase to a rate of between two and
four ships per year once design maturity and construction readiness permit;
(4) the Columbia-class submarine program should be funded with additions to the Navy
budget significantly above the historical average, given the critical single national mission
that these vessels will perform and the high priority of the shipbuilding budget for
implementing the National Defense Strategy;
(5) stable shipbuilding rates of construction should be maintained for each vessel class,
utilizing multi-year or block buy contract authorities when appropriate, until a deliberate
transition plan is identified; and
(6) prototyping of potential new shipboard sub systems should be accelerated to build
knowledge systematically, and, to the maximum extent practicable, shipbuilding
prototyping should occur at the subsystem-level in advance of ship design.
S.Rept. 116-236 states:
Guided missile frigate
The committee notes that a contract for up to 10 guided missile frigates (FFG(X)) was
awarded in April 2020 with a potential cumulative value of $5.6 billion. Given that this is
a new class of ships that will have a significant role in the Navy battle force, the committee
seeks additional information on the program.
Accordingly, the committee directs the Director of the Congressional Budget Office to
submit to the congressional defense committees, not later than October 1, 2020, a report
analyzing the FFG(X) program. The report shall include: (1) An analysis of the estimated
costs of the program in the context of other current and past Navy shipbuilding programs;
(2) An independent cost estimate of the FFG(X) program based on the specific winning
ship design; and (3) Other related matters the Director deems appropriate. (Pages 51-52)
FY2021 DOD Appropriations Act (H.R. 7617)
House
The House Appropriations Committee, in its report (H.Rept. 116-453 of July 16, 2020) on H.R.
7617, recommended the funding level shown in the HAC column of Table 4.
Section 8104(b) of H.R. 7617 as reported by the committee states:
Sec. 8104. …
(b) None of the funds provided in this Act for the FFG(X) Frigate program shall be used to
award a new contract that provides for the acquisition of the following components unless
those components are manufactured in the United States: Air circuit breakers;
gyrocompasses; electronic navigation chart systems; steering controls; pumps; propulsion
and machinery control systems; totally enclosed lifeboats; auxiliary equipment pumps;
shipboard cranes; auxiliary chill water systems; and propulsion propellers: Provided, That
the Secretary of the Navy shall incorporate United States manufactured propulsion engines
and propulsion reduction gears into the FFG(X) Frigate program beginning not later than
with the eleventh ship of the program.
Regarding Section 8104(b) and certain other provisions, H.Rept. 116-453 states:
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DOMESTIC MANUFACTURING REQUIREMENTS FOR NAVY SHIPBUILDING
The Committee consistently has expressed its concern with the Department of the Navy
sourcing surface ship components from foreign industry partners rather than promoting a
robust domestic industrial base. To address these concerns, the Committee retains several
provisions from fiscal year 2020 and a new provision that expands the domestic
manufacturing requirement for several classes of ships under development. Absent
stringent contract requirements in these future surface ship classes, the Committee lacks
confidence that the Navy will make the necessary decisions and provide the required
resources to support a robust domestic industrial base. (Page 13)


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Appendix A. Navy Briefing Slides from July 25,
2017, FFG-62 Industry Day Event
This appendix reprints some of the briefing slides that the Navy presented at its July 25, 2017,
industry day event on the FFG-62 program, which was held in association with the Request for
Information (RFI) that the Navy issued on July 25, 2017, to solicit information for better
understanding potential trade-offs between cost and capability in the FFG-62 design. The
reprinted slides begin on the next page.


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Navy Constellation (FFG-62) Class Frigate (Previously FFG[X]) Program

Slides from Navy FFG-62 Industry Day Briefing


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