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Summary

The Navy's proposed FY2010 budget requests $1,084.2 million to complete the cost of a third Zumwalt (DDG-1000) class destroyer that was authorized but only partially funded in FY2009, and $309.6 million in additional procurement funds to cover cost growth on the first two DDG-1000s, which were authorized in FY2007 and funded in FY2007-FY2008. The Navy estimates the combined procurement cost of the first two DDG-1000s at $6,634.2 million, or an average of $3,317.1 million each, and the procurement cost of the third ship at $2,738.3 million. The Navys proposed FY2010 budget requests $539 million in research and development funding for the DDG-1000 program. The Navys proposed FY2010 budget requests $1,912.3 million to help complete the cost of an Arleigh Burke (DDG-51) class Aegis destroyer to be procured in FY2010. (The Navy also plans to request approval to transfer or reprogram $128.6 million in prior-year funding to help complete the cost of this ship.) The ship received $199.4 million in FY2009 advance procurement funding. The Navy estimates the total cost of this ship at $2,240.3 million. On April 6, 2009, Secretary of Defense Robert Gates announced a number of Department of Defense (DOD) decisions regarding DODs proposed FY2010 defense budget. Among these was a decision to end the DDG-1000 program at three ships and restart procurement of DDG-51 destroyers. Gatess announcement appeared endorse, to some degree at least, a proposal announced by the Navy on July 31, 2008, to halt DDG-1000 procurement and restart DDG-51 procurement. Until Gatess April 6 announcement, OSD publicly had reserved judgment on the Navys July 2008 proposal, stating that further analysis of its merits was needed. Gates stated on April 6 that DODs support for building the all three DDG-1000s was contingent on the Navy reaching an agreement with its two surface combatant builders General Dynamics bath Iron Works (GD/BIW) of Bath, ME, and Northrop Grumman Shipbuilding (NGSB) to transfer the second DDG-1000 from NGSB to GD/BIW, so that GD/BIW would be the builder of all three DDG-1000s. On April 8, it was reported that such an agreement had been reached. As a result, GD/BIW is to build all three DDG-1000s, NGSB is to build the first two DDG-51s to be procured under the DDG-51 restart, GD/BIW is to build the DDG-51, and the two firms will then share in the production of subsequent DDG-51s. Potential issues for Congress include the following: the merits of DODs decision to halt DDG-1000 procurement and restart DDG-51 procurement; the status of a proposal made by John Young, the then-DOD acquisition executive, in memorandum dated January 26, 2009, to begin procuring in FY2012 a ship called the Future Surface Combatant (FSC) that could be based on either the DDG-51 design or the DDG-1000 design (and whether to provide direction to DOD regarding this proposal); whether to complete the procurement funding for a third DDG-1000 in FY2010; whether to continue with the construction of the second DDG-1000; whether to fund the procurement of one or two DDG-51s in FY2010; whether to direct the Navy to build the second and third DDG-1000s to a modified design featuring additional missile-launch tubes in the place of the DDG-1000s Advanced Gun Systems (AGSs); and whether to provide direction to DOD regarding the design of DDG-51s procured in FY2010 and beyond. This report will be updated as events warrant.

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