By Geoff Fein

The Pentagon acquisition chief has issued a pre-decisional memo laying out the path forward for acquisition of DDG-51 DDG-1000 and a new guided missile destroyer referred to as the Future Surface Combatant (FSC).

Additionally, funding FSC under the DDG-1000 program would keep the Zumwalt-class effort from a critical Nunn-McCurdy breach, the memo said.

According to the memo signed by John Young, FSC would be based on either the Arleigh Burke-class hull or the Zumwalt-class hull.

"Funding for the FSC currently resides in the DDG-51 program procurement line, but needs to be moved to reflect the intent of the Defense Acquisition Working Group decision," Young said in the Jan. 26 memo.

The memo was distributed to the Deputy Secretary of Defense, Navy Secretary Donald Winter, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, and Navy acquisition chief Sean Stackley, among others.

If funding for FSC remains in the DDG-51 program or if FSC is built using the DDG-51 hull form, then the DDG-1000 program would be limited to three ships, according to the memo.

"This quantity reduction would result in Nunn-McCurdy breaches," Young wrote.

"However, if the FSC is identified as part of the DDG-1000 program until the decision on FSC baseline is made, then the DDG-1000 program does not have a breach," according to the memo.

Building only three DDG-1000s, under the acquisition plan agreed upon by the Pentagon and the Navy last year, would drive the program acquisition unit cost to $5.9 billion per ship, triggering a Nunn-McCurdy breach, according to Young’s memo.

However, adding in nine FSCs to the mix would keep the program under the threshold of a significant Nunn-McCurdy breach.

While three DDG-1000s would still cost $5.9 billion each under the new plan, the FSC unit cost would be $3.4 billion, if it is funded as part of the DDG-1000 program.

The average procurement cost for each FSC would be $2.3 billion, according to the memo.

Until the decision on the FSC platform and capabilities are finalized, Young said, the Navy will adhere to the following path for surface combatants:

  • the one DDG-51 in FY ’10 and the two in FY ’11 that have been added to the FY ’10 budget will be considered an increase in quantity for the existing DDG-51 program and represent three additional ships;
  • the one FSC ship in FY ’12, two FSC ships in FY ’13, one FSC ship in FY ’14 and two FSC ships in FY ’15 will have the funding maintained in the DDG-1000 program line or in a separate FSC funding line. Until the decision is made on whether FSC is a DDG-1000 or DDG-51-based platform, the funding and quantities will be accounted for in the DDG-1000 program. The FSC decision is expected to be made during FY ’09 in time to support FY ’11 budget decisions; and
  • once the decision on exact capabilities for the FSC ships is determined, then adjustments will be made to funding, quantities, and budget representations, as needed. Any required Nunn-McCurdy actions will be taken at the time the FSC decision is finalized.

Young is recommending that the current FSC funding, which is associated with the DDG-51 program funding line, be moved into the DDG-1000 funding line or a new FSC funding line.

The December Selected Acquisition Reports (SAR) should reflect the budget associated with the DDG-1000 program and count six FSC ships in FY ’12 through FY ’15 as DDG-1000 based platforms, according to the memo.

The December ’08 SAR for the DDG-51 program would reflect the three additional ships added to the budget over FY ’10 through FY ’11. No funding associated with the FSC should be included in the DDG-51 SAR, according to the memo.

The Navy will need to revise its DDG-1000 acquisition strategy to describe the procurement strategy for the FY ’09 ship, the memo said.

The Navy must also get approval from the Pentagon acquisition chief for the DDG-51 acquisition strategy for the FY ’10 and FY ’11 ships, according to the memo.

The memo also notes the Joint Staff is requested to consider tasking the Navy to provide to the Joint Staff for validation a Capabilities Development Document (CDD), or Capabilities Production Document (CPD), as appropriate, for the FSC.

"The CDD or CPD should be ready for validation by the Joint Staff not later than September, 30, 2009," according to the memo.

Young noted in his memo additional studies will be needed including:

  • Program Decision Memorandum (PDM) III FSC Backfit Study. PDM III directed the Navy with OSD office of Programs, Analysis and Evaluation and AT&L to assess the cost, schedule, and feasibility of outfitting FY ’10 through FY ’11 DDGs with required power generation and cooling capacity to support backfit of air and missile defense radar enhanced Ballistic Missile Capability;
  • the PDM III FSC backfit study is to be completed by March ’09;
  • FSC Baseline Study. A technical and capabilities-based study comparing the feasibility and multi-mission capabilities of the DDG-51 and the DDG-1000 needs to be conducted to determine the appropriate baseline for FSC. The study should conclude and a decision should be made before any future decision on any new radar system development that might be envisioned for the FSC. The timeline for the radar development places the FSC baseline decision in the mid-FY ’10 timeframe. The FSC CDD or CPD defines the requirements for the FSC study; and

The FSC Baseline Study must be concluded by Dec. 30, 2009.

"The Navy’s 30-year shipbuilding plan should reflect that FSC requires study and does not conclude an outcome," according to the memo.

"In the near term, the Defense Acquisition Executive (DAE) needs to consider approving the proposed way ahead so that the Navy can obligate $360 million of FY ’09 procurement funding for long lead materials for the DDG-1002 ship," Young said. "DAE needs to determine if all of or only the restart portion of the DDG-51 program should be changed to [an] Acquisition Category 1D (ACAT 1D) or a Special Interest Program."