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Two Billion Dollar DDG-1000 Cost Growth Explained

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The previously unexplained cost growth of the three ships of the Zumwalt (DDG-1000) class of ships found in the Navy’s shipbuilding account over the last five years is a result of funding practices implemented after the program’s 2010 restructure — at least in part.

The cost growth for the three warships had risen about $2 billion over the last five years according to the a study of Navy budget documents by the Congressional Research Service, USNI News reported in April.

At the time, the reason wasn’t readily apparent, according to the report and several other naval experts USNI News contacted in April.

A follow on report from CRS has outlined that part of the cost increase in the program were part of the classes’ restructure of the program in 2010.

“The Navy states that the cost growth shown in the later years of the table reflects, among other things, a series of incremental, year-by-year movements away from an earlier Navy cost estimate for the program, and toward a higher estimate developed by Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD),” according to the latest CRS report on destroyer programs released on May 21 by CRS.

In other words, the CAPE told the Navy to increase spending to a higher Pentagon estimated cost for the program which the Navy did little by little each year instead of all at once, leading to the increased cost in the program but not putting the program at risk for a second so-called Nunn-McCurdy breach.

The Nunn-McCurdy provision is a US statute that requires military equipment cost increases of 25 per cent above the original estimate to be terminated save a review and certification process. The provision also calls for a congressional notification if a program cost increase more than 15 percent.

An April CRS destroyer report provided a table on the cost increases of the program from 2009 to the current budget.

“The Navy states that even with the cost growth shown in the table, the DDG-1000 program as of the FY2015 budget submission is still about 3 percent below the program’s rebaselined starting point for calculating any new Nunn-McCurdy cost breach on the program,” read the May 21 CRS report.

Other cost increases are almost assured — outside of the new CAPE estimates — due to the fact the program was reduced to three ships from an original buy of seven.

“We are staring at some of the developmental costs associated with the lead ship that were compounded by the fact that we went from what was a seven ship program truncated to three and so those first of class costs are magnified over those circumstances,” Sean Stackley, assistant secretary of the Navy for research, development and acquisition (RDA), told USNI News in March.
“Right now there’s a schedule plan that splits out the delivery of the ship in terms of the shipyard and the combat systems. We’re looking at combining those so we can have a more streamlined delivery that gets it out to the fleet on a better timeline, however there maybe some costs that are associated with that.”

The first two ships in the class — Zumwlat and Michael Monsoor (DDG-1001) — are planned to cost around $8.5 billion for the pair, according to Navy estimates as part of the Fiscal Year 2015 Navy budget submissions.

The third ship — Lyndon B. Johnson (DDG-1002) — is estimated to cost $3.56 billion. All are being built by General Dynamics Bath Iron Works in Bath, Maine.

The Zumwalts are about 16,000 tons each and field twin 155 mm Advanced Gun Systems that can fire a GPS guided rocket assisted round about 70 nautical miles. The ship also fields 80 Mk 57 Vertical Launch System (VLS) cells that can field a variety of missiles.

  • Don Bacon

    –USNI, May 27
    Two Billion Dollar DDG-1000 Cost Growth Explained

    Or three billion since FY2009.

    • Secundius

      @ Don Bacon.

      That’s because the US. Navy is going “German” on us. The reason Germany lost WW2, is because they over-sophisticated themselves. They tend to make their weapons too sophisticated, which cause them to break down more often and a specialized repair crew was needed to fix them. They didn’t or didn’t want to understand. The Axiom, “That Quantity takes on a Quality, of All it’s Own”.

      • old guy

        or as ADM Gorshkov said,”Better is the enemy of good enough”.

  • Tony

    This, despite cutting every bit of functionality and automation they possibly could. I say again, the DDG-1000 program will make LCS look like a rational acquisition if anyone takes a hard enough look at it…

    • Rob C.

      I disagree. Least DDG-1000 is survivable and has room for expansion with new technology rolling down the isle. Cost increase on brand new kind of Warship was bound to happen, specially when people keep changing the darn thing. LCS has no physical room to be improved, its considered to be dissposable due status not being meant for frontline combat. DDG-1000 has bit more potential than that, if production has continued costs would been kept down.

      • Secundius

        @ Rob C.

        All the components inside the FREEDOM class LCS, is modular. Their modules were to swapped-out with different modules, depending on mission usage.

  • ELP

    Take the total cost of the program–divide by 3, that is what each ship will cost the taxpayer to make battleship admirals happy. On our way to a 100-ship Navy at this rate.

  • Derek Sage

    Despite this boondoggle, the house wants to keep giving these incompetent buffoons more money to waste.

  • Secundius

    You know during WWII, CEO or shipyard owners go a one dollar bonus check for every ship that came off the slipways, today its at the very least ten-million dollars for every ship. There’s to much Graft, too much Greed.

    • Rob C.

      Ships were built from a common design. Engineered by the Navy’s engineering people. Shipyards assembled them, those ships for the era were not complicated incomparison to what being made today. Also, Liberty & Victory ships are not warships. Those were ships that famous quote hails from.

      • Secundius

        @ Rob C.

        The original design concept for the LIBERTY class Transports, were as one-way only ship. The LIBERTY ships not only delivered the cargo, but delivered themselves. The LIBERTY ship, itself was cargo.
        It brought Britain and Russia, the metal from their hulls as raw material.

        The VICTORY class Transports, were meant to be used as general transports throughout the fighting war. They were never meant too be broken-up for scrap metal general usage.

        • old guy

          A lighter note: Did you know that the LIBERTY ships dimensions are virtually identical to those of NOAH’S ARK?

  • Secundius

    If the GOP had their way, there won’t be an actual Navy, it exist on paper only!

  • ETC L.L.

    What tangible system cost increased? How did Congress read that report and say “OK, that sounds good?” At least the DDG-51′s increase was due to the upgraded Flight III addition with AMDR. The “growth explained” is “a result of funding practices” ?!?!?! The CRS report states that it was basically a two billion dollar charge for a quote request changing the purchase from seven ships to three ships. We just got charged 2 billion dollars for a new estimate and four less ships!!! It is disgusting that most Americans will never see or care about this and are content to leave it in the hands of someone that should just be anonymous to them.

  • Secundius

    The difference between the LIBERTY ship & VICTORY ship is, the LIBERTY ship is a one time only ship. The ship itself, wast to be used as raw materials when it got to it destination. The VICTORY ship didn’t have that handicap and that’s why it was better armed!

  • Secundius

    People ask the question, why these ships. Maybe to question should be, where the supernumeraries too run the ships. I’m all for Patriotism, but don’t use it as a big stick. Unless you plan to reinstate the draft. The GOP policy is too have inner city youths man these ships, why not there own children. Stop giving them deferments, they can stop a bullet just like everybody else that serves.

  • Charles Gallagher

    The article starts in 2009. If you go back a few more years you will find cost growths higher than those cited. You will also find significant technical specification reductions some of which remain highly classified.

  • Secundius

    The LCS program is that the LCS is a Mission Modular Ship and not a Mission Specific Ship like the ZUMWALT or the ARLEIGH BURKE classes. The Latter two classes are designed to be Multi-Purpose Combat Vessels. While the LCS was designed to be a Tailored Mission Specific class of ships. Meaning, if you want it do something specific. You take it back too a drydock, Swap out one set of Mission Specific Modular Containers and replace them with another set. A truely Jack-Of-All-Trades ship design or essentially One-Size-Fits-All ship. It can be anything you want it too be ship.

  • Secundius

    The ZUMWALT is a production/test ship. Sounds a lot like an oxymoron. But, think about it. Nothing of this size and scale has ever been done before. Its both a Concept Ship and a Production Ship, Like and unlike the LCS program, the ZUMWALT is a Plug-And-Play class. It’s modular so you can swap-out odl components and replace them with new ones on-the-fly. No or little down time, a truely revolutionary design class of ship’s

  • old guy

    My old boss “Bud” Zumwalt must be in tears as he watches (from wherever He may be) the stupid, dangerous TUMBLEHOME design idiocy of the ship named for him following the Navy accepted overrun and “Forgetting Curve” program.

  • old guy

    A note to “Secundius”. I’m not sure what you said in your last missive, but previous posts seemed to be savvy and coherent. The LCS was, and is, a poorly conceived make-work program based on a 1976 NAVSEA program called “SEAMOD” developed by a very smart engineer named Roger Dilts. It utilized elements of the successful German “MEKO” design, but added clever standardization and interchangeability aspect not to be found in the LCS. In addition, ship type requirements have changed radically to include the need for a highly maneuverable, fast ship to counter a possible swarm attack. The LCS has neither attribute.

    • Secundius

      @ old guy.

      The FREEDOM class LCS, was specifically designed for “Multiple Mission Usage”, Its a Jack-of-All-Trades design concept. It was not designed to be Mission Specific Design ship.