Lawmaker challenges Defense official's stance on new destroyer

House Armed Services Seapower Subcommittee Chairman Gene Taylor, D-Miss., has taken his fight to put the DDG-1000 destroyer program on indefinite hold directly to the Pentagon's top acquisition official.

In a letter sent Friday to John Young, undersecretary of Defense for acquisition, Taylor warned that expected cost overruns on the DDG-1000 could ultimately bankrupt the Navy's shipbuilding accounts and put many of the service's other programs in jeopardy.

Taylor's letter came in direct response to Young's testimony before the Senate Armed Services Committee last week, during which he said he was "extremely concerned" about the House's action on the program.

The House-passed fiscal 2009 defense authorization bill rejected the Navy's $2.5 billion request for the third DDG-1000 and instead included $400 million in advanced procurement for either the DDG-1000 or the DDG-51 Arleigh Burke Class destroyer.

But Taylor has said he wants the Navy to buy more of the older but more affordable DDG-51s.

In his letter, Taylor stressed that cost projections on the DDG-1000 program are "optimistically low" and could ultimately end up costing hundreds of millions of dollars more for each of the seven vessels the Navy plans to buy.

"If Congress authorizes the DDG-1000 program of record, any cost overruns for the program will most likely not become obvious until at least half of the planned seven vessels are placed under contract," Taylor wrote. "This will subject the Navy's budget to significant financial liability and could cripple Navy shipbuilding plans."

Taylor said he would not object to continuing the destroyer program if prime contractors Northrop Grumman Corp. and General Dynamics Co. would agree to a firm-fixed price contract for $2.6 billion per ship. "From a business perspective, this is unlikely to happen because the shipbuilders know that the Navy estimates are unrealistic," he wrote. Taylor's stance has put him at odds with the Senate Armed Services Committee, whose version of the Pentagon policy bill fully funds the Navy's $2.5 billion request for the third DDG-1000.

During his testimony last week, Young argued that ending the DDG-1000 program would destabilize the destroyer industrial base and drive up costs on the first two ships already on order. "To stop the DDG-1000 program at two ships would unquestionably add substantial costs to that program," Young told the Senate panel. Young also argued that restarting DDG-51 production lines, which have been dormant for years, would be costly. "It is difficult for us to properly estimate the cost of that," Young said, adding that buying just a few additional DDG-51s would be "inordinately expensive."

In a May 7 letter to Senate Armed Services Seapower Subcommittee Chairman Edward Kennedy, D-Mass., Adm. Gary Roughead, the chief of naval operations, estimated that it would cost $2.2 billion to buy one DDG-51 in fiscal 2009, and $3.5 billion to buy two of the ships. The average cost of subsequent ships would be about $1.8 billion, compared to the $2.6 billion projected for the DDG-1000, Roughead wrote. But Young said he has a "number of concerns with the letter" and added that it was "based on key assumptions that are incorrect in some cases."