Out With the New

As budget pressure mounts for its future fleet, the Navy suspends production of a costly destroyer.

Amid growing concerns about the affordability of its shipbuilding efforts, the Navy has decided to pull the plug on one of its most expensive and ambitious modernization efforts: the DDG-1000 Zumwalt-class destroyer.

The Navy's decision shakes up its long-standing blueprint for its future fleet of 313 ships. But it could assuage critics on Capitol Hill-particularly in the House, where lawmakers have eyed the service's shipbuilding plans with a hefty dose of skepticism.

Service officials had long planned to buy seven DDG-1000s, but now want to stop production after the first two are built at Northrop Grumman Corp.'s Ingalls Shipbuilding facility in Mississippi and General Dynamics Corp.'s Bath Iron Works in Maine.

Rather than continue with the stealthy destroyer-whose price tag the Congressional Budget Office estimates at $5 billion apiece for the first two ships-Navy brass have opted to restart production on the older but more affordable DDG-51 Arleigh Burke-class destroyers. According to lawmakers and congressional sources, the Navy plans to buy nine DDG-51s.

Chief of Naval Operations Adm. Gary Roughead's support for the DDG-1000 program had long been considered lackluster. Indeed, in a May 7 letter to Sen. Edward Kennedy, D-Mass., chairman of the Senate Armed Services Seapower Subcommittee, Roughead acknowledged that procurement costs for a single DDG-51 is significantly less than that of a DDG-1000, while the life-cycle costs for the two are similar.

But support for the DDG-1000 had remained high at the upper echelons of the Pentagon, particularly at the office of Defense acquisition chief John Young, who warned House Armed Services Seapower and Expeditionary Forces Subcommittee Chairman Gene Taylor, D-Miss., in a July 2 letter that restarting production on the DDG-51s would "pose a risk to the shipbuilding budget and inject additional cost."

The destroyer debate has become illustrative of growing doubts about the affordability of the Navy's overall shipbuilding plans, particularly as defense procurement budgets begin to tighten, as expected, during the next several years.

Young was present at the July meeting during which Pentagon officials allowed the Navy to proceed with its plan. But he later stressed that the service must proceed "with an understanding that more analysis and discussion of this plan was necessary before there would be agreement on this proposal" as part of the next budget.

Concerns about ship programs could spur more focus on development and acquisition cycles to guard against cost increases and so-called requirements creep, which often drive up the price tags on these programs.

Robert Work, vice president for strategic studies at the Center for Strategic and Budgetary Assessments, called the Navy's shipbuilding efforts a "very unsettled situation" and emphasized that Roughead is trying to balance his books. "Roughead has really been trying to figure out how he builds a future fleet on budget," he says.

In general, the Navy is trying to weigh its desired capabilities against what it can afford, says Young. "There are some cases where I could buy a less capable ship and it be more affordable and run the risk of the threat being able to match that ship," Young, who served as the Navy's assistant secretary for research, development and acquisition, told the Senate Armed Services Committee in June. "I think the Navy is trying to find that reasonable balance."

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