DDG-51 Arleigh Burke - Shipbuilding

Northrop's Ingalls Shipbuilding and GD's Bath Iron Works share the construction of DDG-51 Arleigh Burke destroyers.

Major Milestones include:

• Award Date: Multi-Year Procurement, incrementally funded
• Keel Date: 36 to 72 months after award date
• Launch Date: 11 to 18 months after keel laid
• Christen Date: 2 to 3 months after launch
• Delivery Date: 12 to 24 months after launch
• Commission Date: 3 to 6 months after delivery

Ingalls Shipbuilding builds Aegis destroyers using modular techniques pioneered by the shipyard in the 1970's, and refined during two decades of assembly line construction of destroyers, cruisers, and amphibious assault ships. The ships also benefit from Ingalls' pioneered efforts to integrate advanced computer technology into ship design and construction. The design process for ships built at Ingalls is accomplished using a three-dimensional Computer-Aided Design (CAD) system, which is linked with an integrated Computer-Aided Manufacturing (CAM) production network of host-based computers and localized minicomputers throughout the shipyard. Ingalls' system produces digital data used by the CAM equipment to electronically direct the operation of numerically-controlled manufacturing equipment cutting steel plates, bending pipe, and laying out sheetmetal assemblies, and supporting other manufacturing processes. The technology significantly enhances design efficiency, and reduces the number of manual steps involved in converting design drawings to ship components, improving productivity and efficiency.

During the construction of a DDG-51 destroyer, hundreds of subassemblies are built and outfitted with piping sections, ventilation ducting and other shipboard hardware. These subassemblies are joined to form dozens of assemblies, which were then joined to form the ship's hull. During the assembly integration process, the ship is outfitted with larger equipment items, such as electrical panels, propulsion equipment, and generators. The ship's superstructure, or "deckhouse," is lifted atop the ship's midsection early in the assembly process, facilitating the early activation of electrical and electronic equipment. When the ship's hull integration was complete, the ship is moved over land via Ingalls' wheel-on-rail transfer system, and onto the shipyard's launch and recovery drydock.

Forty-nine Arleigh Burke Class destroyers were requested during the Carter Administration, and the Reagan Administration raised the number to 63. However, in 1987 the Congress cut the authorization to 29 and slowed the rate of construction from 5 to 3. The lead ship was eventually delivered -- after some 21 months delay -- in 1989.

The Navy had 38 Arleigh Burke-class destroyers in its force, under construction, or under contract as of April 21, 1997, and planned to procure an additional 19 destroyers through the next decade, completing the 57 ship DDG-51 program by procuring the remaining ships through fiscal year 2004. The Navy planned to build 12 ships between 1997 and 2001 which were planned to be delivered to the fleet without cooperative engagement or theater ballistic missile defense capability.

DDG 51 class ships were originally planned to be procured at a rate of five per year. A forty-five percent reduction in the procurement rate since the program began resulted in higher unit costs, lower efficiency, poor overhead planning, and questionable viability of shipbuilders and key subcontractors. To mitigate the risks associated with industrial base stability, the Navy proposes building at a more constant rate of three DDG 51s per year. Completion of the Arleigh Burke destroyer program, along with the earlier procurement of Ticonderoga-class cruisers, will allow the Navy to achieve a force of 84 Aegis-capable surface combatants by fiscal year 2010.

Congress appropriated $3.6 billion for construction of 4 new destroyers in fiscal year 1997 and gave the Navy authority to procure a total of 12 destroyers in fiscal years 1998 through 2001 using a multiyear acquisition strategy. In its biennial budget submission for fiscal years 1998 and 1999, the Navy requested about $2.8 billion and $2.7 billion, respectively, for a total procurement of six destroyers.

The FY 1999-2003 shipbuilding program included funds for 15 DDG-51-class destroyers, achieving the procurement objective of 57 of these ships. Twelve of the 15 DDG-51s will be procured under a multiyear acquisition strategy approved by Congress in the FY 1998 budget. The changes made to the shipbuilding program this year have achieved a stable procurement rate of three DDG-51s per year in FY 1999-2003. Advance procurement funds are programmed for FY 2001 to support the revised acquisition profile and a possible extension of the multiyear plan that was approved in FY 1998.

The FY2001 Future Years Defense Program (FYDP) showed that the Navy plans to buy only two DDG 51 destroyers per year over a three year period (fiscal years 2002 2004) and two destroyers (one DDG 51 and one DD 21) in fiscal year 2005. The Navy's Arleigh Burke (DDG 51) Class Industrial Base Study of 1993 stated that procurement of three destroyers per year could only sustain the destroyer industrial base if some additional, non-DDG 51 work, were available to each sipbuilder. The study also stated that at a rate of two ships per year, a very substantial amount of non-DDG 51 work would be required for each shipbuilder and risk to survival of one or both shipyards could be high. The Navy testified that a proposal to build two DDG 51 ships per year would result in potential reductions in shipyard workforces and the workforce skill mix, and that maintaining the industrial base would be perilous. The Senate Armed Services committee concurred with the Navy's assessment regarding the industrial base at the time of the original study

Stretching out this procurement would cause reductions in workforce skill mix that will result in higher costs for not only the DDG 51 ships, but also for other Navy work in the shipyards that build DDG 51 ships. In fact, the FY2001 budget request showed a dramatic cost increase of between $60.0 million and $100.0 million per ship when a projected procurement rate of two DDG 51 ships per year was computed. Therefore, buying six ships at a rate of two ships per year for three years would cost the taxpayers between $360.0 and $600.0 million more than buying the same ships over a two year period. The Navy appeared to be willing to pay this premium in an attempt to partially accommodate the destroyer industrial base potential problems (three destroyers per year are required to maintain the industrial base) caused by delaying DD 21 one year.

The Navy documented over $1.4 billion in savings by buying three ships per year under the multiyear procurement authority provided by Congress. Continuing the proven economical rate of three ships per year and use of multiyear authority would save additional taxpayer dollars on this program which the Navy intends to complete. Therefore, the Senate Armed Services committee recommended an increase of $143.2 million in advance procurement for DDG 51 to achieve the maximum savings for the taxpayer and to relieve some pressure on the shipbuilding account in future years. The additional advance procurement, coupled with the savings to the taxpayer of buying six ships in two years instead of three years, should result in procurement of six ships on a two year multiyear contract for the approximate cost of five ships procured at a lower rate.

The President's Budget Submission for 2001 reflected the same new ship construction program for FY01 as the previous year, although there was a reduction of two ships across the FYDP. Tight budgeting practices over the past several years in support of maintaining current readiness forced some tough decisions across all shipbuilding programs, but in particular for surface combatant programs. The FY2001 budget request included $2.7 billion for the procurement of three Arleigh Burke -class DDG 51 destroyers. The House bill and the Senate amendment authorized the budget request.

Compared to the FY2000 plan, the Clinton Administration's FY2001 amended FYDP delayed the procurement of the first DD-21 class land attack destroyer by one year (to FY2005), increased by ome ship the number of DDG-51s to be procured in the FYDP, and stretched out the procurement of the final DDG-51s by two years, to FY2005, to compensate for delaying the start of DD-21 procurement. DDG51 ship acquisitions were rephased and stretched across the FYDP as compared to the FY 2000 budget. Acquisitions for the DDG51 class ships changed from three ships per year in FY00-03 to a 3-2-2-2-1 profile starting in FY01. This change resulted in a net increase for the DDG program of one ship, and was needed to offset the industrial base impact of delaying the lead ship of the next generation surface combatant - DD21 - from FY 04 to FY05. However, these two changes in combination resulted in a net decrease of two surface combatants across the FYDP as compared to the previous year's budget.

The House Appropriations Committee added $820 million for an additional Arleigh Burke class (DDG-51) destroyer, bringing the total of DDG-51s the FY2002 defense appropriation bill to four. The Senate version of the bill contained funding for only three destroyers.

By mid-2002 the Pentagon was close to reaching an agreement with Northrop Grumman and General Dynamics to swap the workload on the USS Arleigh Burke (DDG-51)-class Flight IIA destroyers and the San Antonio (LPD-17)-class amphibious transports. The plan would consolidate Flight IIA Arleigh Burke construction at GD's Bath Iron Works facility in Maine, with Northrop Grumman's Avondale shipyard in Mississippi focusing on getting the first ships in the LPD-17 class delivered to the Navy. Under the plan four of the LPD-17s to be built by GD's Bath Iron Works would be swapped for four DDG-51s scheduled for construction at Northrop Grumman's Ingalls shipyard. The plan is intended to minimize the risks on both programs [DDG-51 and LPD-17] and minimize the risks to the Navy in terms of cost and performance.

The Navy's original plans were for at least 20 ships of the DDG 51 Class, with the potential for up to a total of 60 ships. As of 2002 plans were for 57 DDG 51 Class destroyers through FY 2004, representing an estimated total program cost of $40-45 billion with the last ship scheduled to deliver in the year 2009.

On September 13, 2002 Bath Iron Works (BIW) and Northrop Grumman Ship Systems (NGSS) were awarded fixed price incentive multiyear contracts worth a combined total of approximately $5 billion for construction of 10 DDG 51-class Aegis Destroyers.

BIW, a unit of General Dynamics (GD), was awarded a $3,170,973,112 modification to contract for six ships that will be distributed between fiscal 2002-2005, one in fiscal 2002, one in fiscal 2003, two in fiscal 2004, and two in fiscal 2005. The first additional DDG for BIW will be the DDG 102, originally planned for Northrop Grumman (Ingalls). The addition of the multiyear ships increases the number of ships under that contract from one ship, DDG 102, to seven ships total. The work will be performed in Bath, Maine.

NGSS, formerly Ingalls Shipbuilding, Inc. was awarded a $1,968,269,674 for four DDG 51-class ships, one in fiscal 2002, one in fiscal 2003, one in fiscal 2004, and one in fiscal 2005. Work will be performed in Pascagoula, Miss.

Two of the multiyear ships awarded to BIW in fiscal 2004 and fiscal 2005 are in accordance with the memorandum of understanding (MOU), "Concerning the Reallocation of LPD-17 And DDG-51 Ship Construction Workload," signed and announced by GD, NGSS and the Navy in June 2000. The MOU outlines the terms and conditions for transferring the construction of four LPD 17-class amphibious transport dock ships from BIW to NGSS owned-Ingalls and Avondale shipyards in exchange for construction of four additional DDG 51-class destroyers or equivalent workload at BIW.

Speaking about the award, Navy Secretary Gordon England said, "The award of the DDG 51 multiyear contract today is not only a significant milestone for one of the Navy's most successful acquisition programs, but also the cornerstone for the completion of the DDG 51 and LPD 17 workload exchange agreement. The DDG multiyear contract and the workload exchange agreement will save the taxpayers more than $500M through the life of these two programs and provide for increased workload stability at Bath, Ingalls and Avondale shipyards. This award is a testament to the teamwork, professionalism and value created by our industry and government team. The agreement is also a testament to our partnership with Congress, as a number of key members have been instrumental in shaping and approving the swap and multiyear agreements."

Some outyear projections indicate that two additional ships might be requested in FY2006. Of the DDG-51's total procurement cost of about $900-plus million (when procured at a rate of 3 ships per year), about $350 million goes to the shipyard that builds the ship, with the remainder going to firms that build components for the ship.

Construction of the current Arleigh Burke-class of destroyers will be extended for three years -- from 2006 to 2009 -- as a result of the November 2001 restructuring of the DD-21 program into the DD(X) program.

As of December 31, 2001, DDG 51 Destroyer program costs increased $10,219.1 million (+18.3%) from $55,807.6 million to $66,026.7 million, due primarily to the quantity increase of 6 ships from 58 to 64 ships (+$5,853.5 million), post delivery and outfitting requirements for the 6 additional ships (+$378.2 million), and revised estimates resulting from a change in the estimating assumptions with respect to the cost-quantity relationship for the 6 additional ships (+$1,507.7 million). There were also increases for the addition of the Remote Minehunting System (+$154.3 million); additional funds for previously unfunded requirements (+$579.4 million); revised cost estimates for ship construction, Government Furnished Equipment (GFE), and outfitting and post delivery (+$525.4 million); and the application of revised escalation rates (+$433.2 million).

On January 21, 2005, the Department of Defense announced that Bath Iron Works, a unit of General Dynamics, had received a $562.1 million modification to its FY02-05 DDG 51 Class multi-year contract to build the final ship of the Arleigh Burke Class, DDG 112, the 34th DDG 51 Class Destroyer built by Bath Iron Works. The ship would be built in Bath, Maine, and the Navy expects delivery in December 2010. DDG 112 would benefit from the considerable technological advancements and engineering upgrades that have been developed, tested and installed in the class since the commissioning of DDG 51 July 1991.