DDG-1000 Program - 2007
Under the Navy's proposed dual-yard acquisition strategy, Northrop Grumman Ship Systems and General Dynamics Bath Iron Works would simultaneously build lead ships beginning in FY07. Pending final approval of the plan, the Defense Department had authorized the Navy to award advance contracts to assist both shipyards to prepare to transition into detail design after the Milestone B decision. Development of major ship systems would continue under separate contracts.
The 2007 Budget provided $2.6 billion to begin construction of two ships. The DD(X), in conjunction with the LCS and future CG(X) cruiser, would create a complementary, balanced force to address a spectrum of threats in an uncertain future. Congress denied a winner-take-all acquisition strategy in the FY05 Defense Emergency Supplemental Act and FY06 National Defense Authorization Act for the DD(X), and as a result in FY07 the Department of Defense proposed a "dual lead ship" strategy which would maximize competitive pressure and keep design efforts on track. This section would provide authority to enter into construction of the first two DD(X)s based on funding over two years from the Shipbuilding and Conversion, Navy (SCN) appropriation.
In order to accomplish these objectives, the Navy has defined a new way ahead: "Dual Lead Ships." This effort tried to create a strong, mutually dependent partnership between the shipyards and the Navy to reduce cost and improve collaboration. Importantly, the Navy's new strategy fully addressed industry's key issues and responded to Congressional concerns. The key features are:
- Sole source lead ship detail design and construction contracts with the shipbuilders
- Equal split of common detail design with each yard doing their respective production design
- Shipyards procure electronics, ordnance, and IPS from system developers as contractor furnished equipment
- Funding phased to synchronize start of fabrication dates in both shipyards
- The shipyards are mutually dependent on each other to urgently and cooperatively complete the DD(X) detail design
- Sole source contracts to software and system developers
- Transition to production of systems culminating in Production Readiness Reviews
- Complete software releases and provide to shipyards as Government furnished information
- Importantly, this approach lowers the cost to the Navy by avoiding incremental pass through fee costs
- Keep open the option for allocated procurement or various competitions in Fiscal Year 2009 and beyond
Being able to benchmark the lead ships against each other provided an unprecedented pressure and opportunity to control cost on the lead ships. Finally, because each builder would have completed significant construction on sections of the ships and would have completed detail design, the Navy would have information and options for future acquisition strategy decisions.
Split funding in FY07 and FY08 would synchronize the construction of both lead ships in the same fiscal year without creating an unaffordable spike in the SCN account. A critical aspect of the Department's acquisition plan was that both shipyards be positioned on a fair and equal footing. If one shipyard started construction first, that yard would have both a real and perceived competitive and technical advantage for several years over the follow yard. Additionally, the follow shipyard would have little incentive to provide design products in timely manner to the lead yard. Split funding the first two ships would not set a precedent for future funding of additional next generation destroyers and the Navy has budgeted for funds adequate to fully fund follow ships.
The FY07 Budget request included $794M in RDT&E, N for continued software development and $2.6B in SCN for the first increment of the first and second DD(X). While the funding strategy for these ships was unique, the reasons for supporting a dual lead ship approach had been compelling. Based on Congressional direction that prohibited a winner take all strategy, the Navy consulted with industry, OSD, and Congress to chart our way forward for the DD(X) program. The key objectives are to acquire the DD(X) Class destroyers in as cost effective a manner as possible, create pressures to control and reduce cost, acquire these ships on a timeline that meets the warfighters' needs, lower overall risk in the program, treat each of the industry partners fairly, and preserve a viable industrial capability for complex surface combatants.
The Navy's FY06-FY11 Future Years Defense Plan identified funding for one ship per year from FY07 to FY11 for a total of 5 ships. As of 1 December 2005, the Navy planned to build 8-12 DD(X). The Marine Requirements Oversight Council (MROC) position was that there is a need for 24 DD(X) to fully support a major combat operation within desired time frames. The Marines state that they could accomplish the mission with fewer than 24 ships at risk of added time to operation and hitting fewer targets.
As of March 2007, three of DDG 1000's 12 critical technologies were fully mature. While 7 other technologies were approaching full maturity, 5 of them were not expected to be fully mature until after ship installation as testing in a realistic environment was not considered feasible. The 2 remaining technologies, the volume search radar and total ship computing environment, had only completed component level demonstrations and subsequently remained at lower levels of maturity. Concurrent with its efforts to mature ship technologies, the Navy had initiated detail design activities in the program. The Navy was planning to complete at least 75 percent of DDG 1000's total detail design products ahead of lead ship construction.
The seven other technologies then approaching full maturity included the advanced gun system and its projectile, hull form, infrared signature mockups, integrated deckhouse, integrated power system, and peripheral vertical launching system. The Navy currently planned to complete development of the integrated deckhouse and peripheral vertical launching system prior to beginning construction on DDG 1000's two lead ships. However, practical limitations prevented the advanced gun system and its projectile, hull form, integrated power system, and infrared signature mockups from being fully demonstrated in an at-sea environment until after lead ship installation. Two other technologies, the volume search radar and total ship computing environment, remained at lower levels of maturity as of March 2007.
The volume search radar, along with the multifunction radar, together comprise DDG 1000's planned dual band radar system. While the multi-function radar had reached maturity as of March 2007, considerable testing remained for the volume search radar. The Navy planned to install volume search radar equipment at a land-based test facility during March 2007. Following installation, the volume search radar would undergo land-based testing, which the Navy planned to complete by March 2008 in an effort to increase the radar's maturity prior to lead ship construction start planned for July 2008. However, full maturity of the technology would not occur until after ship installation. In addition, because the efforts were concurrent, there was risk that any delays or problems discovered in testing for the volume search radar could ultimately impact dual band radar production plans. According to Navy officials, in the event the volume search radar experienced delays in testing, it would not be integrated as part of the dual band radar into the deckhouse units that would be delivered to the shipbuilders. Instead, the Navy would have to task the shipbuilder with installing the volume search radar into the deckhouse, which program officials reported would require more labor hours allocated according to a 2007 Government Accountability Office review.
The Navy's total ship computing environment for DDG 1000 required developing hardware infrastructure and writing and releasing six blocks of software code. Although development of the first three software blocks progressed in line with cost and schedule estimates, program officials reported that changes in the availability of key subsystems developed external to the DDG 1000 program, introduction of nondevelopment items, and changes in program integration and test needs prompted the Navy to defer some of the functionalities planned in software release four to software blocks five and six, and full maturity of the integrated system would not be attained until after ship construction start.
The Navy responded to the March 2007 Government Accountability review, stating that the assessment was factually correct, but misleading in areas of technology maturity and program funding. According to the Navy, DDG 1000 critical technologies achieved technology readiness levels appropriate to gain authorization in November 2005 to enter detail design phase. Since that event, technologies had been further tested, and were all on track to meet cost and schedule targets. Also, given the unique nature of shipbuilding, with detail design and construction efforts spread over approximately 5 years, the Navy claimed that comparing DDG 1000 technology readiness levels to GAO-developed best practices criteria was not valid. Further, the Navy noted that GAO's cost comparison computing percent change from January 1998 to the current program baseline did not account for program progression through the acquisition cycle and could be misinterpreted as cost growth. The GAO countered in their report suggesting that the approach was valid because previous studies had shown that technological unknowns discovered late in development led to cost increases and schedule delays.
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