By Emelie Rutherford
The Pentagon’s acquisition chief has questioned the accuracy of a Navy letter stating the life-cycle costs of the new DDG-1000 destroyer and older DDG-51 destroyer are similar while the procurement cost of a DDG-51 is “significantly less.”
The May 7 letter is seen on Capitol Hill as bolstering the stance of lawmakers who want to re-start production of the DDG-51s and stop the Navy’s plans to continue purchasing the nascent DDG-1000s. Chief of Naval Operations Adm. Gary Roughead sent the missive to Senate Armed Services seapower subcommittee head Sen. Edward Kennedy (D-Mass.), and also sent a similar letter to panel ranking member Sen. Mel Martinez (R-Fla.).
Pentagon acquisition chief John Young said Tuesday that he has “a number of concerns with the letter [to Kennedy] that was provided to the CNO for his signature,” saying the “letter’s numbers are based on key assumptions and are incorrect in some cases.”
Young’s comments came in response to questioning about the letter from Sen. Susan Collins (R-Maine)–an outspoken opponent of truncating the Navy’s planned DDG-1000 buy–during a Senate Armed Services Committee (SASC) hearing.
The fiscal year 2009 defense authorization bill the House passed May 22 calls for pausing continued procurement of the DDG-1000s and directing the service to spend $400 million in advance-procurement funding either for restarting procurement of DDG-51 destroyers or for continuing the DDG-1000 program. The version of the bill the SASC marked up April 30 calls for granting the Navy monies it requested to buy one DDG-1000–which would be the Navy’s third such destroyer–in FY ’09. The Senate is expected to take up the bill this month.
Young told the SASC Tuesday that the DDG-51 prices in the letter assume DDG-51 procurement would be continued beyond two additional ones. Yet he said, “If those were the only ones, they would be more expensive, I believe.”
He also said the DDG-51 prices in the letter assume the two DDG-51s could be awarded to one shipyard. Yet he said each ship would likely be awarded to a different yard–which would increase the cost above what was in the letter.
Young added that “it’s questionable” whether the letter’s DDG-51 prices are accurate if no DDG-1000 is built in FY ’09.
“Because…to talk more technically, this is about overhead absorption and use of the business base,” he said. “If there’s no DDG-1000 beyond the first two, then those DDG-51s will be more expensive, I believe, than the record suggests. And then the DDG-1000 prices for the two lead ships…would certainly increase.”
Young noted that the DDG-51 costs $10 million more per year to operate, which he said he doesn’t think is “correctly reflected in the letter.”
Young told Collins he would provide additional information on his concerns with the letter.
Questioned by the Maine senator, Young also said because the DDG-51 program has been out of production, “there’s no question we will have multiple obsolete parts issues.”
Young said his “goal in setting up the strategy for DDG-1000” was “to balance the Navy’s long-term cruiser requirements with the Marine Corps fire-support requirements.”
He cited the possibility of removing the guns from the DDG-1000s and replacing them with missile cells, which he said could create “the potential for a first-generation cruiser with modest changes.”
Roughead’s May 7 letter to Kennedy states: “On balance, the procurement cost of a single DDG-51 is significantly less than that of a DDG-1000, and the life-cycle costs of the two classes are similar.” Kennedy’s office provided a copy of the letter, which details estimated procurement, operations, and support costs for buying the two types of destroyers.
The missive notes that without firm contracts for future DDG-51s or DDG-1000s, the Navy can only provide a best estimate of costs that would be incurred with either program.
Roughead’s letter comes in response to a letter the senator sent April 21.
The Navy had no response to questions on the letter from Defense Daily by deadline.
Young said Tuesday he is “extremely concerned” about the destroyer plans in the House-passed defense bill.