The Navy awarded General Dynamics [GD] a contract Friday to build a steel deckhouse for the third Zumwalt– class (DDG-1000) destroyer, effectively dropping plans to proceed with the composite structures that were built by Huntington Ingalls Industries [HII] for the first two ships in the class.

Costs increases on the composite deckhouses prompted the Navy earlier this year to announce it was considering moving to a steel deckhouse for the third ship. The service solicited bids from shipbuilders, even as it continued protracted negotiations with HII in an attempt to drive down the cost of the composite version.  HII did not submit a bid for the steel deckhouse, a company spokeswoman said.

The first DDG-1000 under construction at General Dynamics Bath Iron Works. Photo by General Dynamics

Naval Sea Systems Command (NAVSEA) spokesman Chris Johnson said the negotiations with HII for the third composite deckhouse were unsuccessful, and the Navy determined it would be nevertheless cheaper to move to steel.

“They both met the weight requirements. It was a cost decision,” he said, noting that steel is cheaper than composites.

The $212 million contract covers the design and construction of the steel superstructure, which includes the deckhouse and hangar, as well as the aft peripheral vertical launching system (PVLS). General Dynamics is already building the hulls for all three warships.

“This award demonstrates the Navy’s commitment to balancing capability and affordability,” Rear Adm. David Lewis, program executive officer for ships at NAVSEA, said in a statement. “This superstructure and aft PVLS award for DDG-1002 continues the development of the DDG-1000 program toward initial operational capability.”

The future USS Lyndon B Johnson, or DDG-1002, is scheduled to be delivered to the Navy in fiscal 2018. It will be the last of the three planned Zumwalt destroyers. The Navy has previously said the composite deckhouses were part of the reason the program had experienced some cost growth.

The decision to award the steel deckhouse to General Dynamics and abandon the composite structure is a blow to HII. A spokeswoman said, however, the company had been working to bring down the costs of the composite deckhouse.

“We demonstrated considerable improvement from the first set of class products to the second set and we are confident this trend would have continued on DDG-1002,” spokeswoman Beci Brenton said. “We are disappointed that we will not build the composite deckhouse and hanger for DDG-1002, but we are committed to working closely with the Navy to complete our work on DDG-1001 by the first quarter of 2014.