Navy Reduces Number of New Hulls
for New Destroyer Program

The House and Armed Services Sea Power and Expeditionary Forces Subcommittee met on July 31^st to hear testimony concerning the future of Navy Destroyer Acquisition Programs, including the DDG-1000 Zumwalt. That future is looking less and less attractive for Raytheon, Northrop Grumman, BAE Systems, General Dynamics Bath Iron Works, and the hundreds of sub-contractors who have spent billions on the project, with billions more hanging in the balance.

In testimony before the subcommittee, Sea Power and Expeditionary Forces Subcommittee Chairman Gene Taylor remarked: “When the Ranking Member and I first called for this hearing, the purpose was to ensure that all of the facts associated with the capabilities and procurement costs of the DDG 1000 and the capabilities and procurement costs of the DDG 51 were discussed in open session by a variety of expert witnesses.  We envisioned a hearing that would clear the air of rumor and lay out all the facts without championing any ‘side’ in the debate.

Much has changed in one month’s time.  Last week the Secretary of the Navy and the Chief of Naval Operations announced they would stop the DDG 1000 destroyer class at two ships and re-start the procurement of DDG 51 class destroyers.

Predictably, this announcement from the Navy has generated a firestorm here on Capitol Hill.  There are Members who are opposed to the decision and Members who support the decision.  There also appears to be significant efforts by certain defense contractors to shore up support for the DDG 1000 and have Congress overturn the Navy decision.”

“Last week the Secretary of the Navy and the Chief of Naval Operations announced they would stop the DDG 1000 destroyer class at two ships and re-start the procurement of DDG 51 class destroyers.”

Washington insiders have widely speculated that the real reason for the decision is the persistence of repeated warnings by budget experts from the Congressional Budget Office (CBO), Congressional Research Service (CRS) and the Government Accountability Office that the ships face huge potential cost overruns — up to $5 billion each and more.

The Navy originally planned for 32 DDG-1000 destroyers as replacements for the pervasive DDG-51 Arleigh Burke Class. That number was reduced to 24 ships. In 2005 the number was further reduced to seven by Navy acquisition planners. The current plan stands at two. The Navy has already invested more than ten years and multi-billions of dollars in an effort to create a more lethal and leaner surface combatant to deliver increased littoral missions performance.

For additional perspective concerning the mission profiles of the DDG 1000 Destroyer, please see our post on this site entitled: US Navy Developing Surface Fleet of Tomorrow

For a broader perspective concerning Naval Sea Systems Command (NAVSEA) programs, please see our post on this site entitled: Naval Forces Changing Course From Blue Water to the Littoral

Raytheon, awarded $994 million dollars in November of 2007 for development of the two lead ships has been driving the development of electronics, sensors, command & control systems and an advanced total ship computing environment (TSCE). In partnership with IBM and Red Hat, the Linux based TSCE system was developed for use in future vessels including the CG(X) Cruiser, amongst other future designs.

Industry executives were surprised by the Navy’s decision to persist with the Arleigh Burke class destroyer, the lead ship commissioned in 1991. In his testimony, Chairman Taylor stated “The DDG 51 (is) the finest destroyer in the world today.  A ship that is capable of multiple missions, from anti-submarine warfare to cruise missile strike warfare to area air defense with its Aegis weapons system is the premier workhorse of the fleet.  And perhaps most important, the ship is capable of serving in a ballistic missile defense role, which the DDG 1000 cannot do.  Fifty three of these ships are currently in the fleet, nine more are in various stages of construction.”

The Navy’s decision will likely have a negative impact on all DDG-1000 contractors. Particularly hard hit will be the hundreds of small specialty contractors such as Banneker Industries (North Smithfield RI), Global Relief Technologies (Portsmouth NH), Optical Alchemy (Portsmouth NH), Accumetrics Corporation (Westwood MA), amongst many, many others.

The Navy’s Program Executive Office (PEO) Ships has not yet announced a final decision regarding the total number of DDG-1000’s that will be ordered, a quantity that will probably remain a moving target. As the presidential election looms in November, it is more likely than not that any decision will be delayed until Spring 2009 when the fiscal 2010 budget process is undertaken.

The DDG-1000 lead ship is currently in production at the General Dynamics Bath Iron Works in Bath Maine. The Bath shipyard is widely expected to also receive orders to build an additional 8 to 11 DDG-51 hulls required by the Navy.

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