Monday, April 10, 2017

Navy DDG-51 and DDG-1000 Destroyer Programs

The Navy has been procuring Arleigh Burke (DDG-51) class Aegis destroyers since FY1985. The two DDG-51s requested for procurement in FY2017 are to be the 75th and 76th ships in the class. The 10 DDG-51s programmed for procurement in FY2013-FY2017 (in annual quantities of 3-1-2-2-2) are being procured under a multiyear-procurement (MYP) contract. One of the DDG-51s funded in FY2016 is to be the first of a new DDG-51 design variation called the Flight III design, which is to incorporate a new and more capable radar called the Air and Missile Defense Radar (AMDR).

As part of its action on the Navy’s FY2016 budget, Congress provided $1 billion in unrequested procurement funding to help pay for a DDG-51 that would be in addition to those being procured under the 10-ship MYP contract for FY2013-FY2017. The Navy, in its budget submission, notes this additional $1 billion in funding for the DDG-51 program, but does not show the additional DDG-51 in its shipbuilding plan. The $433 million in procurement funding that would be needed to complete the cost of this additional DDG-51 is, however, included as the second item on the Navy’s FY2017 unfunded requirements list (i.e., the list of FY2017 programs that the Navy desires, but for which it did not have sufficient funding in FY2017).

The Navy estimates the combined procurement cost of the two DDG-51s requested for procurement in FY2017 at $3,393.9 million. The ships have received a total of $182.6 million in prior-year advance procurement (AP) funding. The Navy’s proposed FY2017 budget requests the remaining $3,211.3 million needed to complete the ships’ estimated combined procurement cost. The Navy’s proposed FY2017 budget also requests $16.0 million in so-called cost-to-complete procurement funding to cover cost growth on DDG-51s procured in FY2011. The Navy’s proposed FY2017 budget also requests $271.8 million in procurement funding to complete construction of Zumwalt (DDG-1000) class destroyers procured in prior years, and $144.4 million in research and development funding for development work on the AMDR.

Potential FY2017 issues for Congress concerning destroyer procurement include the following:

whether to approve, reject, or modify the Navy’s FY2017 procurement funding requests for the DDG-51 and DDG-1000 programs, and the Navy’s FY2017 research and development funding request for the AMDR program;

whether to provide some or all of the $433 million in procurement funding needed to complete the funding for the additional DDG-51 that was partially funded with $1 billion in FY2016;

whether to provide the Navy with authority for entering into an MYP contract for DDG-51s to be procured in FY2018-FY2022;

continued cost growth in the DDG-1000 program;

cost, schedule, and technical risk in the Flight III DDG-51 program;

issues raised in a January 2016 report from DOD’s Director of Operational Test and Evaluation (DOT&E)—DOT&E’s annual report for FY2015; and

the lack of an announced Navy roadmap for accomplishing three things in the cruiser-destroyer force: restoring ship growth margins; introducing large numbers of ships with integrated electric drive systems or other technologies that could provide ample electrical power for supporting future electrically powered weapons; and introducing technologies for substantially reducing ship operating and support (O&S) costs.

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