New Navy Ship's Cost Overstated in News Reports, Official Says

By Gerry J. Gilmore
American Forces Press Service

Feb. 6, 2009 - The projected unit cost of the next-generation U.S. Navy destroyer is much lower than the figures being cited in some news reports, a senior Defense Department official said here yesterday. The DDG-1000 is a high-tech, guided-missile destroyer that is envisioned to eventually replace the Arleigh Burke class of warships developed 30 years ago.

The Pentagon would pay between $2.2 to $2.5 billion for each new DDG-1000 ship after the regular production line is up and running, John J. Young Jr., undersecretary of defense for acquisition, technology and logistics told reporters at the Pentagon.

Young said he disagrees with news reports that say DDG-1000 vessels would cost up to $7 billion per copy.

"There's no basis for any [cost] projection that this ship is going to cost 5 or 6 or 7 billion dollars," Young said.

The cost of a first prototype, or lead, DDG-1000 ship is about $3.3 billion because the government pays for the initial drawings and production set-up, Young said. The unit cost of follow-on ships would decrease due to industrial economies of scale, he said.

Conversely, unit production costs can rise if the number of items to manufacture is reduced from the original schedule, Young explained.

The DDG-1000 series is designated the Zumwalt class, named after late Navy Adm. Elmo Zumwalt Jr. The new ships feature computer-aided design, modular construction, high-tech armaments and radar, as well as a unique, streamlined hull design.

Originally, 32 DDG-1000 vessels were to be built at shipyards in Maine and Mississippi. Recent production plans called for two ships to be built.

However, the DDG-1000 is on hold for now, as Pentagon and interagency officials re-examine the project, Young said.

"Aside from the warfighting analysis, we do need to do some producibility analysis, manufacturing analysis and cost analysis," he said.

Some officials suggest that modifying Arleigh Burke class ships would be a less expensive way to create a new vessel, Young said. That approach, he said, wouldn't produce as much cost savings as imagined, and would result in a vessel possessing undesirable mass without the capabilities of the DDG-1000.

"You cannot do that without significant changes in that ship," Young said of proposals to rework Arleigh Burke ships to create a new vessel. "You will have to add cooling capacity; you will have to add electrical generating capacity," as well as upgraded radar equipment.

And, the Arleigh Burke class destroyer "has already gained weight because it is 30 years into its service life and ships are designed with a certain amount of weight-carrying capacity," he said.