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Summary

The Navy wants to procure three new classes of surface combatants -- the DD(X) destroyer, the CG(X) cruiser, and a smaller surface combatant called the Littoral Combat Ship (LCS). The Navy reportedly wants to procure a total of 7 DD(X)s, 19 CG(X)s, and 55 LCSs. The first two DD(X)s are to be procured in FY2007, with each ship being splitfunded (i.e., incrementally funded) across FY2007 and FY2008. The total estimated cost of the two ships is $6,633 million, or an average of $3,316 million each. The two ships have received a total of $1,010 million in FY2005 and FY2006 advance procurement funding. The FY2007 budget requests an additional $2,568 million in procurement funding for the two ships. The final $3,055 million in procurement funding for the two ships is to be requested in FY2008. The Navy estimates that subsequent DD(X)s will cost roughly $2.5 billion each. The first CG(X) is to be procured in FY2011. The first LCS was procured in FY2005, three more were procured in FY2006, and the Navy's proposed FY2007 budget requests $521 million to procure two additional ships. The estimated procurement cost of each LCS has grown to about $260 million, an increase of about 18% over the original target cost of $220 million. Section 124 of the conference report on the FY2006 defense authorization bill (H.R. 1815/P.L. 109-163) limits the cost of the two FY2007 ships to $220 million per ship, or a total of $440 million. The Navy's FY2007 unfunded requirements list (URL) -- its "wish list" of items desired but not included in the FY2007 budget -- includes an additional two LCSs for an additional $520 million. The DD(X), CG(X), and LCS programs raise several oversight issues for Congress, including the affordability of the DD(X) and CG(X) and the total cost of the LCS program. Options for Congress for the DD(X) program include approving the program as proposed by the Navy and supplementing the industrial base, if needed, with additional work; deferring procurement of the lead DD(X) to FY2008; procuring two or more DD(X)s per year; building DD(X)s at a single yard, or building each DD(X) jointly at two yards; terminating the DD(X) program now (or after procuring one or two ships as technology demonstrators), and supplementing the industrial base with additional work until the start of CG(X) procurement; and starting design work now on a smaller, less expensive cruiser-destroyer and procuring this new design, rather than DD(X)s or CG(X)s, starting around FY2011. Options for Congress on the LCS program include shifting procurement funding for LCS mission modules to the Navy's ship-procurement account; procuring a few LCSs and then evaluating them before deciding whether to put the LCS into larger-scale series production; procuring LCSs at a rate of up to 10 per year; procuring LCSs at a rate of less than 6 per year; and terminating the LCS program and instead investing more in other littoral-warfare improvements. This report will be updated as events warrant.

Related Legislation:
• H.R.1815

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