Home » Budget Industry » Navy Requires $450 Million More to Complete Zumwalt-Class Due to Shipyard Performance


Navy Requires $450 Million More to Complete Zumwalt-Class Due to Shipyard Performance

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DDG-1000 under construction in 2013. US Navy Photo via General Dynamics Bath Iron Works

The procurement cost of the three-ship destroyer Zumwalt-class (DDG-1000) has increased by $449.5 million since last years largely shipyard performance issues in the construction of the ships at General Dynamics Bath Iron Works, several Navy and congressional sources told USNI News.

The new estimate of the cost for the construction of the three-ship class was included in the Navy’s Fiscal Year 2017 budget submission with an estimate of $12.73 billion for the trio of guided missile destroyers – up from $12.28 billion in the FY 2016 submission, as noted by the Congressional Research Service.

The new estimated total cost of Zumwalt (DDG-1000), Michael Monsoor (DDG-1001) and Lyndon B. Johnson (DDG-1002) – including research and development costs – is now about $22.5 billion with the estimates included.

The total is about the procurement cost – construction minus absent R&D – of the Navy’s first two Gerald R. Ford-class carriers.

Congressional officials told USNI News the cost was in large part due to the performance of the shipyard in completing the construction of the Zumwalts – which feature a complex first-of-type integrated power system that has proved harder-than-expected for the Navy and BIW to build and test.

USNI News Graphic

USNI News Graphic

Though the ships are being built at BIW, the Navy is acting as the lead systems integrator coordinating efforts from BIW, Raytheon and other vendors to assemble the ships.

BIW differed comment on the cost increase to the Navy but issued a statement on Tuesday to USNI News.

“General Dynamics Bath Iron Works, the Navy and other Navy contractors have successfully completed DDG 1000’s alpha and builder’s trials and continue to work toward acceptance trials, to be followed by delivery,” said company spokesman Matt Wickenheiser.

Some of the cost growth is likely due to the fallout of the since-resolved labor dispute with BIW unions who rankled at a management proposal to bring in outside workers to assist with work to complete not only the Zumwalts but also the Arleigh Burke (DDG-51) guided missile destroyers — also being built in the yard.

Specifically, a shortage of electricians at the yard caused setbacks not only in the DDG-1000 program but also two Burkes being built at the yard, USNI News reported last year.

When asked by USNI News, the Navy did not directly address the reasons for the cost increase but said, “the request for additional funding is directly related to the delivery of DDG-1000 and estimates to complete DDG-1001 and 1002.”

The Navy did provide more detailed estimates breaking out the cost of the individual ships that included an additional $400 million for post delivery work outside of the procurement line items bringing the cost to $13.2 billion.

“The total procurement cost for [the DDG-1000 program] includes $3.8 billion for DDG 1000, $2.8 billion for DDG-1001, and $2.4 billion for DDG-1002. The balance of the procurement costs include $3.8B for non-recurring engineering (NRE) and $400 million for post-delivery and outfitting, totaling $13.2B,” read the statement from Navy Research, Acquisition and Development spokeswoman Capt. Thurraya Kent.

The cost increases will be included in the Navy’s budget requests from FY 2017 to 2020.

Kent did also say the cost increase would not endanger the program of tripping a Nunn-McCurdy breach.

The Nunn-McCurdy provision is a US statute that requires military equipment cost increases of 25 percent 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 increases more than 15 percent.

When the DDG-1000 program was trimmed from seven hulls to three in 2010, the program tripped a Nunn-McCurdy breach and was restructured with new shipbuilding cost estimates outlined by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD).

“DDG-1000 remains well within the program baseline,” Kent said.
“A Nunn-McCurdy breach is triggered at 15 percent above an approved Acquisition Program Baseline; the program is well below the N-M threshold.”

The following is the complete April 5, 2016 statement from Capt. Thurraya Kent, provided to USNI News on the DDG-1000 cost increase.

The total procurement cost for DDG 1000 includes $3.8B for DDG 1000, $2.8B for DDG 1001, and $2.4B for DDG 1002. The balance of the procurement costs include $3.8B for Non-recurring Engineering (NRE) and $0.4B for post-delivery and outfitting, totaling $13.2B. The SCN End Cost funding is requested for DDG 1000, 1001 and 1002 shipbuilding completion, HM&E activation and associated program support. The request for additional funding is directly related to the delivery of DDG 1000 and estimates to complete DDG 1001 and 1002.

DDG 1000 remains well within the program baseline compared to the March of 2011 APB, which reflects the Nunn-McCurdy review, and is approximately 1% above the objective value in the 2011 APB. A Nunn-McCurdy breach is triggered at 15% above an approved APB; the program is well below the N-M threshold.

 

  • Curtis Conway

    Though functional surface combatants the DD 1000 Zumwalt Class will demonstrate some new technologies that will effect naval engineering and the designs of things to come for decades. I hope we can introduce a new Real Frigate introducing new & improved HM&E w/ 4160v electrical generation, distribution and storage system, Hybrid Electric Drive propulsion system, possess a very capable Passive detection, tracking, and targeting system in addition to a capable non-rotating 3D radar (AN/SPY-6(V) 9-RMA version), Directed Energy Weapons for self defense, and perhaps a rail gun if they are ready. Make it the smallest vessel with an AN/SQS-53 sonar, and build 50+, or make half without the hull mounted sonar with Arctic capable Ice Hardened hulls.

    • A fighting ice breaker – there’s an idea for you. Only problem I can see is that there are Russian submarines under that ice. (And probably Russian Arctic ocean floor oil ops by 2025.)

      • Curtis Conway

        Sub base in the Arctic?

        • Murmansk is probably close enough. On the other hand you’ve got to ask yourself where does the other end of that Hainan Island submarine base tunnel come out?

          • Curtis Conway

            LOL!

    • Gregory Dittman

      We are hitting the physical limits of warfare technology. In some important ways, it is still using or simulating decades old technology. I don’t know why they didn’t go for the for the
      Arleigh Burke-class destroyer hull, engine and transmission and rework the deck

      • Curtis Conway

        You have stumbled upon most of the answer. The only world wide globally capable hull is the Arleigh Burke hull form, which we copied from Russian (more accurately Soviet) designs. It is short and fat so it can handle (survive) the Northern latitudes in rough weather, and still be able to employ weapons. Upgrading to the Hybrid Electric Drive will stretch their fuel, and upgrading to the 4160v electrical system is safer and more efficient for the generation, distribution, storage and use of electrical power in this new Directed Energy/Railgun environment we are about to leap into. This is why the new cruiser should be a stretched Burke Double-ender (two guns).

  • Ed L

    not my tax dollars. Let Bath Iron works pay for it.

    • Phil Verhey

      You should try reading before commenting next time… it’s NOT biw’s fault… the (just shy of) $450million is the Navy and Union’s doing… ok i’m sure it’s not that black & white … but biw’s hands were & still are tied.

      • Ed L

        you mean dumping there workforce, cost of work changing monthly. I would rather have a 1/2 dozen more submarines and let this ship be develop over a couple of decades. 1/2 billion to complete it! Admiral Z spinning in his grave. Yes, I meet the man when I was a Seaman. He was visiting Norfolk Naval Base. Almost crapped myself.

  • Ken N

    We could have had 7 more urgently needed Virginia subs with VPM instead of these 3 “experimental” overpriced ships…

    • @USS_Fallujah

      By my count that’s 8 Virginia Class SSNs or 11 DDG-51s we could have built instead of the 3 DDG-1000s (Can we at least designate them as CGs?). Add in the fiasco that is the LCS/FFE program (not to mention CG(X) R&D!) and you see USN’s force shortfall is not the result of the ORP, but the SC-21 (Surface Combatant for the 21st century) program.
      They sought a way to stay relevant in a non-peer global military environment, and instead put the USN 10 years behind in meeting the threat from the resurgence of China & Russia.

      • USNVO

        Did you remember to take into account the $1 billion plus that DOE pays for the reactor? Total cost to the nation is over $2.5 billion each for every Virginia class. The latest DDG-51s have been running over $1.5 billion a pop and that is before the Flt IIIs. So more more like 5 SSNs or 8 DDGs. A dollar, or 13 billion of them, just doesn’t go as far as it used to.

        • Ken N

          2.5 billion was the number I was using for the Virginia class. The DDG-1000 program has run about 25 billion so far. That equals about 10 Virginia boats. But I went with 7 because VPM will add to the Virginia cost.

          • USNVO

            Ok, I was discounting the R&D money since a large part of it was used for needed advances such as MK56 VLS, Integrated Electric Drive, and non-HALON fire fighting.

          • UKExpat

            Why include R&D for Integrated Electric Drive ? BAE and Rolls Royce did this along time ago and have been successfully using it in new build and designs since.

        • @USS_Fallujah

          Most of the authorized dollars for the DDG-1000s was in the 2007-2012 timeframe, so that money goes a lot farther, especially when you’re looking at the per unit cost of the SSNs or DDG-51s they could have purchased instead.

          Also, the funds for the reactors don’t come from DOE. NNSA provides design, development, and support for the naval nuclear power program, but the appropriations to build/purchase the reactors comes through DoD’s budget.

  • DaSaint

    It’s criminal how military contractors propose new technologies, estimate a price, obtain the non-copmpetitive contract and yet still get to charge eggregious cost overruns. Really?

    This program is corporate welfare, plain and simple. Americans on welfare can’t do what theyre doing. Even that has been reformed, but not industrial welfare scams. Some new and useful technologies, sure, but inflated and exaggerated costs that the taxpayer has to bear. We’re entering an era when every vessel ia a billion dollars minimum, and some over12 billion. That’s absurd.

  • John B. Morgen

    We should cut our losses, and just complete one so-called Admiral Zumwalt destroyer. Consequently, the Navy and the defense contractor do [not] have a clear handle to manage the Admiral Zumwalt program—effectively at all levels of construction and deployment.

  • Banderas

    I have mixed feelings on the Zumwalt. I honestly thought that at some point this ship would actually be able to save us money if it went into full production. that this line of ships has the potential to replace three different ship classes; the Cruiser, Destroyer, and Iowa class Battleship. Building one common hull/platform being used across 3 specialized variants can really drop the manufacturing costs in full rate production. Especially since the production line is still hot, and all the kinks/obsticles have been ironed out from the first 3 ships that bave been built.
    But after reading stories like this, I have reservations.

  • Rob C.

    Wasn’t these issue caused because the uncertainty in the acquisition progress? Bath let ago alot people due to the draw down of the construction of ships. DDG-1000 series, cost so much due to the class being reduced to 3 ships from 31, where entire cost was spread out over the time of the ship’s projected construction plan.

  • Banderas

    One of the reasons I find it so difficult to say no to this ship and program is because we’ve already invested billions of dollars in researching it, why should we drop all that and start the design/engineering process all over again. I also strongly feel that this design should be future proof for a respectable amount of time, taking into consideration all of its new technology, cross section reduction enhancements, and most importantly power generation for all of the energy intensive technology that is going to be implemented in the very near future. Specifically the AMDR radar, energy directed weapons, and railguns.

  • DB45

    This is stupid. You may as well just hand this country over to anyone at this rate. I think we should shoot people who give money to this. We need the best we have not this greedy costly overruns