DDG-51 Arleigh Burke - Production Restart

By mid-2008 the Navy was considering re-starting the DDG 51 class destroyer upgraded with an improved radar system to fill an urgent need in ballistic missile defense. The House Armed Services Committee noted that it would only support that decision if the industrial base for surface combatant construction was not affected. The committee expected the Secretary of Defense, subject to the availability of appropriations, to enter into advance procurement and advance construction contracts for the construction of surface combatants balanced between the two current surface combatant shipyards, taking into account workforce challenges still in effect on the Gulf Coast due to the lingering economic effects of Hurricane Katrina.

In July 2008 Navy announced plans to truncate the DDG 1000 program at two ships and reopen the DDG 51 line to better align surface combatant investment strategy. Navy planned funding of long lead time items to restart production of the DDG-51. The Navy planned to restart the DDG 51-line with one ship in 2010, two in 2011, one in 2012, two in 2013 and one each in 2014 and 2015.

According to the Navy, the DDG 51 was a proven, multi-mission guided missile destroyer. She is the Navy's most capable ship against ballistic missile threats and adds capacity to provide regional ballistic missile defense. DDG 51 spirals will better bridge the ballistic missile defense gap to the next generation Cruiser. Production costs of DDG 51s are known. The risks associated with re-opening the DDG 51 line were less than the risks of continuing the DDG 1000 class beyond 2 ships when balanced with the capability and capacity of pursuing the 313 ship fleet.

Ships are constructed at both General Dynamics (GD) Bath Iron Works (BIW) and Northrop Grumman Shipbuilding (NGSB). By the year 2008 a total of 62 ships had previously been authorized and appropriated, with the most recent procurement of three ships in FY 2005. A total of 53 ships have been delivered to the Navy. Five ships remained under construction at GD BIW, and 4 at NGSB. The last ship under construction, DDG 112, was scheduled for delivery in FY 2011. All material for DDG 51 Class ships currently under construction has been procured, with the majority of the long lead material purchased in an Economic Order Quantity buy in FY 2002.

DDG 51 class production has been extremely stable, with successful serial production at both shipbuilders. Despite some setbacks, such as the impacts of Hurricane Katrina at NGSB, the costs associated with DDG 51 class shipbuilding are well understood. The Aegis Weapon System has been incrementally developed successfully to add increased capabilities and transition to the use of open architecture and increased use of commercial systems.

Additionally, the DDG 51 modernization program was modernizing the Hull, Mechanical, and Electrical (HM&E) and Combat Systems. These combined upgrades support a reduction in manpower and operating costs, achieve expected service life, and allow the class to pace the projected threat well into the 21st century.

Based upon a Navy assessment, including discussions with both current shipbuilders, to explore any subcontractor issues, a restart of DDG 51 procurement in FY 2009 was feasible. However, several ship and Government Furnished Equipment vendor base issues (including configuration change issues and production line re-starts) must be addressed in order to award and construct additional ships, which will increase ship costs above the most recently procured ships. The most notable being the restart of the DDG 51 reduction gear production. The Navy was confident that these issues can be resolved to support a FY 2009 restart. DDG 51 class restart beyond FY 2009 presents significant risks and therefore additional costs.

However, both shipbuilders have indicated to the Navy that these lead time challenges can be mitigated with advance procurement and an adjusted build sequence, and that DDG 51 restart in FY 2009 was executable in both shipyards. Regarding the combat systems, the last production contracts were awarded in 2006. The cost and ease of restarting those production lines was a function of time, and part availability on military specification items which would need to be addressed.

Given the truncation of the DDG 1000 program at two ships, the Navy estimate for procurement of a single DDG 51 class ship in FY 2009 was $2.2 billion. This estimate utilizes the latest audited Forward Pricing Rate Agreements (FPRAs) rates. Impacts for production line restart and contractor furnished equipment/government furnished equipment obsolescence are included. The Navy has not finalized the acquisition strategy for a FY 2009 DDG 51 and follow-on procurements. The Navy will consider stability of the industrial base during the planning of the specific strategy.

In FY13 the program requested Congressional Approval for a FY13-17 Multi-Year Procurement. Advance Procurement identified in FY13-14 required to support MYP. Flight III/AMDR configuration will be executed via Engineering Change Proposals. The shipbuilder ECP effort is reflected in the Change Orders cost element, beginning with the last FY16 ship. FY15 AP supports introduction of FLT III. Advance Procurement funding is requested in FY17 for a new MYP beginning in FY18.

The U.S. Navy awarded General Dynamics Bath Iron Works a contract 04 June 2013 valued at $2.8 billion for the construction of four Arleigh Burke-class destroyers, with an option for a fifth ship. “This contract adds four ships to our workload in a fiscally challenging and highly competitive environment, and provides a clearer picture of our n ear-term future,” said Jeff Geiger, president of Bath Iron Works. “Continuation of the DDG 51 program provides important work for the men and women of Bath Iron Works and allows us to extend our record of delivering these critical surface combatants to the U.S. Navy.” The option for the fifth ship, if exercised, would bring the total value of the contract to approximately $3.5 billion.

Geiger said the work of Maine’s congressional delegation was critical in support of the multi-year procurement approach. “We appreciate the strong support of our senators and representatives, who have been instrumental in educating their colleagues and others about the vital national-security need for a strong naval fleet, and their advocacy on behalf of the shipbuilders of Maine,” Geiger said.

There were currently two DDG 51 destroyers in production at Bath Iron Works, Rafael Peralta (DDG 115) and Thomas Hudner (DDG 116). The shipyard began fabrication on DDG 115 in November 2011, and delivery to the Navy was scheduled for 2016. Fabrication on DDG 116 began in November 2012, and that ship was scheduled to be delivered to the Navy in 2017.

On 27 September 2018 Huntington Ingalls Industries, Pascagoula, Mississippi, was awarded a $5,104,668,778 fixed-price-incentive, firm target multiyear contract for construction of six DDG 51 class ships, two in fiscal 2018 and one each in fiscal 2019 through 2022. This contract includes options for engineering change proposals, design budgeting requirements, and post-delivery availabilities on the awarded firm multiyear ships, which, if exercised, would bring the cumulative value of this contract to $5,253,076,779. This contract includes options for construction of additional DDG 51 class ships. These options may be subject to future competitive actions in accordance with the terms and conditions of the contract, and therefore the dollar values are considered source selection sensitive information and will not be made public at this time (see 41 U.S. Code 2101, et seq., Federal Acquisition Regulation (FAR) 2.101 and FAR 3.104).

Work will be performed in Pascagoula, Mississippi (91 percent); Erie, Pennsylvania (1 percent); and other locations below 1 percent (collectively totaling 8 percent), and is expected to be completed by April 2029. Fiscal 2018 shipbuilding and conversion (Navy) funding in the amount of $1,712,643,749 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was procured via a limited competition between Huntington Ingalls Inc. and Bath Iron Works pursuant to 10 U.S. Code 2304 (c) (3) and FAR 6.302-3 (Industrial Mobilization), with two offers received. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity (N00024-18-C-2307).

On 27 September 2018 Bath Iron Works, Bath, Maine, was awarded a $3,904,735,559 fixed-price-incentive, firm target multiyear contract for construction of four DDG 51 class ships, one each in fiscal 2019 through 2022. This contract includes options for engineering change proposals, design budgeting requirements, and post-delivery availabilities on the awarded firm multiyear ships, which, if exercised, would bring the cumulative value of this contract to $4,030,194,579. This contract also includes options for construction of additional DDG 51 class ships. These options may be subject to future competitive actions in accordance with the terms and conditions of the contract, and therefore the dollar values are considered source selection sensitive information and will not be made public at this time (see 41 U.S. Code 2101, et seq., Federal Acquisition Regulation (FAR) 2.101 and FAR 3.104).

Work will be performed in Bath, Maine (61 percent); Cincinnati, Ohio (5 percent); Atlanta, Georgia (4 percent); York, Pennsylvania (2 percent); Coatesville, Pennsylvania (2 percent); Falls Church, Virginia (2 percent); South Portland, Maine (1 percent); Walpole, Massachusetts (1 percent); Erie, Pennsylvania (1 percent); Charlottesville, Virginia (1 percent); and other locations below 1 percent (collectively totaling 20 percent), and is expected to be completed by June 2028. Fiscal 2018 shipbuilding and conversion (Navy) funding in the amount of $25,017,500 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was procured via a limited competition between Huntington Ingalls Inc. and Bath Iron Works pursuant to 10 U.S. Code 2304 (c) (3) and FAR 6.302-3 (Industrial Mobilization), with two offers received. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity (N00024-18-C-2305).