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i 

45–259 2010

[H.A.S.C. No. 110–169] 

NAVY DESTROYER ACQUISITION 

PROGRAMS 

HEARING 

BEFORE THE

SEAPOWER AND EXPEDITIONARY FORCES 

SUBCOMMITTEE 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 31, 2008 
(II) 

SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

GENE TAYLOR, Mississippi, Chairman 

NEIL ABERCROMBIE, Hawaii 

RICK LARSEN, Washington 

MADELEINE Z. BORDALLO, Guam 

BRAD ELLSWORTH, Indiana 

JOE COURTNEY, Connecticut 

KIRSTEN E. GILLIBRAND, New York 

JOE SESTAK, Pennsylvania 

ROSCOE G. BARTLETT, Maryland 

TERRY EVERETT, Alabama 

J. RANDY FORBES, Virginia 

JOE WILSON, South Carolina 

BILL SHUSTER, Pennsylvania 

DOUG LAMBORN, Colorado 

ROB WITTMAN, Virginia 

WILL EBBS, Professional Staff Member 

JENNESS SIMLER, Professional Staff Member 

ELIZABETH DRUMMOND, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2008 

Page 

HEARING: 

Thursday, July 31, 2008, Navy Destroyer Acquisition Programs ........................ 1 

APPENDIX: 

Thursday, July 31, 2008 .......................................................................................... 57 

THURSDAY, JULY 31, 2008 

NAVY DESTROYER ACQUISITION PROGRAMS 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Bartlett, Hon. Roscoe G., a Representative from Maryland, Ranking Member, 

Seapower and Expeditionary Forces Subcommittee .......................................... 4 

Taylor, Hon. Gene, a Representative from Mississippi, Chairman, Seapower 

and Expeditionary Forces Subcommittee ........................................................... 1 

WITNESSES 

Francis, Paul L., Director, Acquisition and Sourcing Management, U.S. Government Accountability Office ............................................................................. 40 

Labs, Dr. Eric J., Senior Analyst, Congressional Budget Office .......................... 37 

McCullough, Vice Adm. Barry, USN, Deputy Chief of Naval Operations for 

Integration of Capabilities and Resources; accompanied by Allison Stiller, 

Deputy Assistant Secretary of the Navy, Ship Programs ................................. 6 

O’Rourke, Ronald, Specialist in Naval Affairs, Congressional Research Service .......................................................................................................................... 35 

APPENDIX 

PREPARED STATEMENTS: 

Francis, Paul L. ................................................................................................ 107 

Labs, Dr. Eric J. ............................................................................................... 93 

McCullough, Vice Adm. Barry, joint with Allison Stiller .............................. 64 

O’Rourke, Ronald .............................................................................................. 75 

Taylor, Hon. Gene ............................................................................................. 61 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS SUBMITTED DURING THE HEARING: 

Mr. Kennedy ..................................................................................................... 132 

Mr. Langevin ..................................................................................................... 131 

Mr. Taylor ......................................................................................................... 132 

Mr. Taylor on behalf of Mr. Larsen ................................................................ 131 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

NAVY DESTROYER ACQUISITION PROGRAMS 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE, Washington, DC, Thursday, July 31, 2008. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2212, Rayburn House Office Building, Hon. Gene Taylor (chairman 

of the subcommittee) presiding. 

OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

Mr. TAYLOR. The hearing will come to order. 

I want to welcome everyone and say this may be the most important hearing this subcommittee has held since a year ago January 

when we had the hearing on the procurement of mine-resistant ambush protected vehicles. 

I want to thank all of you for being here. 

And because of the importance of this topic, the ranking member 

and I have extended an invitation not only to our fellow colleagues 

on the full committee and in the full House, but also any Members 

of the Senate who wish to participate. 

So, in accordance with the Rules of the House, I ask unanimous 

consent for our colleagues to be able to participate today. 

Hearing no objection, our colleagues will participate in regular 

order after all members of the subcommittee have had an opportunity to ask questions. Because of time constraints and the number of Members who wish to ask questions, the clerk will maintain 

the five-minute clock during the question-and-answer period for the 

members. We have been very fortunate, and I am told we are not 

expecting any votes on the House floor for about two hours, and so 

that works in our favor. 

When Mr. Bartlett and I first called this hearing, the purpose 

was to ensure that all the facts associated with the capabilities and 

the procurement costs of the DDG 1000 and the capabilities and 

the procurement costs of the DDG 51 were discussed in an open 

session by a variety of expert witnesses. We envisioned a hearing 

that would clear the air of rumor and lay out all of the facts without championing any side of the debate. 

Much has changed since that time. Last week, the Secretary of 

the Navy and the Chief of Naval Operations (CNO) announced that 

they would stop the DDG 1000 destroyer class at two ships, and 

restart the procurement of the DDG 51 class of destroyers. They 

propose an additional eight ships in the five-year plan beginning 

next year. 
2 

Predictably, this announcement from the Navy has generated a 

fire storm. There are Members who are opposed to the decision, 

and Members who support the decision. There also appears to be 

significant efforts by some defense contractors to shore up support 

for the DDG 1000 and Congress to overturn the Navy’s decision. 

We still need to have this hearing to clear the air on mission capabilities and cost for the two destroyer programs. 

By now, I presume our Navy witness, particularly Vice Admiral 

McCullough, who is a senior officer in the Navy charged with developing future platforms and technologies, will attempt to educate 

the committee on the reasons the Chief of Naval Operations has 

decided that he can best support the interests of national security 

with continuing the line of DDG 51 class ships than he can with 

the small class of highly capable but expensive DDG 1000s. 

The committee was and remains concerned concerning the cost 

estimates for the DDG 1000. But let us be perfectly clear, this subcommittee did not recommend canceling the DDG 1000 program as 

some in the press have said. This subcommittee did recommend 

and the full House did adopt in May a pause for the third DDG 

1000 while the development of technologies and the true cost of 

construction became known. This subcommittee also recommended 

allowing the option of returning to the DDG 51 class if the Navy 

could prove it was in the best interest of our Nation. The report 

accompanying our bill clearly states that the funding provided in 

the Fiscal Year 2009 National Defense Authorization Act could be 

used for either DDG 1000 advance procurement or DDG 51 advance procurement. 

I would like to make my position perfectly clear: I want the Navy 

to have the finest, most capable fleet in the world. I want the Navy 

to have a sufficient number of ships with the capabilities needed 

to counter the next generation of threats. 

I don’t think we have enough submarines, and this subcommittee 

has worked in a bipartisan manner to allow the Navy to increase 

the production of submarines. My friends, Joe Courtney of Connecticut and Rob Wittman of Virginia, were instrumental in this effort. 

I don’t think we have enough amphibious assault ships for our 

expeditionary forces, and with the support of Mr. Bartlett, we have 

authorized an additional Amphibious Transport Dock Ship (LPD) 

for the Navy’s fleet. 

And I don’t think we have the correct balance in our surface combatant force. 

I understand the history of the DDG 1000. It grew out of the DD 

41 program and became the poster child for revolutionary change 

of ship capabilities during the Rumsfeld era. The question before 

this Congress is simple: Does this ship have the correct capabilities 

that our Navy needs in the future? Does our Navy ever envision 

shore-bombardment again? If not, why design a ship which is sized 

for a gun that won’t be used? In this day of precision-guided munitions and air dominance, the idea of a World War II style Naval 

bombardment needs to be debated. 

This leads us to DDG 51, without question, the finest destroyer 

in the world today. A ship that is capable of multiple missions, 

from anti-submarine warfare (ASW) to cruise missile strike warfare 
3 

to area air defense with its Aegis weapon system, it is the premier 

workhorse of our fleet. And perhaps most important, the ship is capable of serving in a ballistic missile defense (BMD) role, which the 

DDG 1000 cannot do. Again, I think this bears repeating: The DDG 

51 is capable of serving in a ballistic missile defense role; the DDG 

1000 is not. 

Fifty-three of the DDG 51s are currently in the fleet. Nine more 

are in various stages of construction. If the Navy wants to build 

more of them, we need more information; information not just 

about cost targets for new ships, but information on the total concept of support for the entire fleet of destroyers. The modernization 

program for destroyers is just as important as the construction program. We can never allow the decommissioning of ships, like we 

did with the first five Aegis cruisers, because they could not be 

modernized to meet the new threat. When a ship is retired at less 

than 30 years of age, the Navy has failed and this Congress has 

failed in our oversight. We can only get to a 300-ship Navy if we 

are building at least 10 ships a year and we keep them in the fleet 

for at least 30 years. 

So this committee is interested in the DDG 51 modernization 

program. We will also question why the Navy is not modernizing 

these destroyers at a faster rate and doing the modernization in 

construction shipyards which have the expertise and experience to 

do major modifications. 

We would like to know how we can use these technologies developed in the DDG 1000 weapon system and propulsion, and back fit 

them into the DDG 51s during modernization. 

So we have a lot to discuss. Our Navy has a tough road ahead. 

There are still some pretty large hurdles in Congress that we will 

need to jump, and hopefully this hearing will allow the Navy to explain their side of the issue. 

We have two panels of experts today to walk us through all of 

these issues. We are very fortunate to have Vice Admiral 

McCullough give the subcommittee a brief tutorial of both vessels 

at the beginning of his testimony. Members will also find a sideby-side description of the ships in a memorandum prepared by 

staff. 

Our Nation needs to get this right. Our Nation needs to put our 

Navy on a stable path of building ships and building them at a 

time and cost as projected. Our shipyards and the contractors who 

support them deserve to know what we expect them to do and 

when we expect them to do it. But more important, we need to give 

our Naval commanders the capability they need to defeat all current and potential threats. 

So I believe the debate needs to focus on the capabilities of these 

ships, and I remind my colleagues and the public that the numbers 

of ships itself is a significant capability. The full Congress must 

weigh the capabilities of these ships, the costs associated with 

these ships and the effects on the Nation’s national security industrial base when making the final decisions whether to proceed or 

not to proceed in the destroyer program. 

I am very happy to acknowledge our first witnesses today. The 

Secretary has truly sent his ‘‘A’’ team: Ms. Allison Stiller, Deputy 

Assistant Secretary for Ship Programs in the Office of the Assist-
4 

ant Secretary of the Navy for Research, Development and Acquisition; and Vice Admiral Barry McCullough, who is the Deputy Chief 

of Naval Operations for Integration of Resources and Capabilities. 

Our second panel also consists of witnesses well known to this 

committee: Mr. Ron O’Rourke, who is the senior analyst in Naval 

affairs with the Congressional Research Service; Dr. Eric Labs, 

who conducts independent ship cost analyst with the Congressional 

Budget Office; and Mr. Paul Francis, who heads the Maritime 

Analysis Branch at the Government Accountability Office. 

I want to thank all of the witnesses for being with us today, and 

I want thank the phenomenal staff that this subcommittee has for 

helping get everybody here today and for their work in preparing 

for this hearing. 

I now want to recognize our very, very capable ranking member, 

Mr. Bartlett. 

[The prepared statement of Mr. Taylor can be found in the Appendix on page 61.] 

STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE FROM MARYLAND, RANKING MEMBER, SEAPOWER AND 

EXPEDITIONARY FORCES SUBCOMMITTEE 

Mr. BARTLETT. Thank you very much. 

Good morning and welcome to both panels, Admiral McCullough, 

Ms. Stiller; and on the second panel, Mr. O’Rourke, Mr. Francis 

and Dr. Labs. 

It is a pleasure to have you here with us today, and I am sympathetic to the challenges you face. 

For years now, in fact even up to a few months ago, the Secretary and the CNO have sent you to testify before this subcommittee to explain, and at times, to defend the Navy’s shipbuilding plan. In particular, we have long debated the wisdom of 

developing the DDG 1000. But I understand, after speaking to the 

CNO last week, that the Navy has finally come to the conclusion 

that the Nation would be better served by extending the DDG 51 

production line and truncating the DDG 1000 line at two ships. 

Now you have joined us with the daunting task of explaining this 

about-face and the consequences of such a decision. It is appropriate for Congress to question this decision and to assume the role 

of devil’s advocate to ensure that we do not haphazardly embark 

on another deviation to the shipbuilding plan. But I will tell you 

up front what I told the CNO, I for one applaud this move. 

The chairman and I have both said over and over that the Navy 

will never achieve a 313-ship Navy without either top-line relief or 

a significant change in the mix of platforms. 

The Navy shipbuilding plan was based on several assumptions, 

none of which were realistic. The Navy postulated that, first, personnel costs would not increase because the Navy’s active end 

strength could be reduced. I will note this has not proved true for 

any of the Navy’s sister services. 

Second, there would be no increase in operations and maintenance accounts, but the price of fuel alone has invalidated this assumption. Overall, DOD fuel expenditures grew by 380 percent 

from 1997 to 2007, even though fuel purchases only increased by 

26 percent during this time frame. 
5 

Third, funding for research and development would be reduced 

and stay low, in effect trading for today’s capabilities on the backs 

of tomorrow’s sailors. But given the challenges we have seen in developing technologies for many of our current platforms, this, too, 

does not hold true. 

And, fourthly, that shipbuilding funds would be protected among 

the procurement accounts. One can argue that the Navy has done 

this to a certain extent, but we have real shortages in other areas, 

such as Naval aviation. Moreover, cost increases within the shipbuilding accounts come at the expense of other shipbuilding programs, as we have seen with the T–AKE (Dry Cargo/Ammunition 

Ship), the Littoral Combat Ship (LCS) and LPD 17. 

And fifthly, requirements in cost growth could be prevented on 

future ships. Again, LCS has been a prime example of the fallacy 

of this assumption. 

Therefore, given that none of these assumptions have been 

shown to be plausible, then the only other alternative is to look at 

the mix of platforms. The DDG 1000 program is the obvious first 

choice for reevaluation because it is the largest and most expensive 

combatant we are building, and surface combatants are the backbone of our battle force, and it is undeniable that the costs for this 

program have grown. The original Navy estimate for the fifth 

DDG(X) was between $1.06 billion and $1.23 billion. Now the Navy 

estimates it would cost double that, approximately $2.3 billion. 

Many independent analysts have cautioned about the potential 

impacts to the Navy should the cost of the DDG 1000 continue to 

grow. 

Some of our witnesses today are among that number, and I will 

quote Bob Work from the Center for Strategic and Budgetary Assessment who has stated, ‘‘Indeed, even if the Navy’s optimistic 

ship cost estimates prove to be true, it seems certain that the seven 

DDG 1000s and 19 CG(X)s will continue to have inevitable disproportionate impacts on plans for the future surface battle line 

and the larger 313-ship battle fleet.’’ 

Moreover, I repeatedly stated that a class of seven ships is no 

class at all, but rather a technology demonstration program on a 

massive scale. When I learned it was unlikely that the DDG 1000 

hull could be used in the CG(X) program, the begrudging support 

I had for this program began to fade. 

However, I will issue one note of caution. As we reevaluate our 

platform mix, we must ensure that we choose platforms that will 

optimize the capabilities of our fleet for the future threat, not to 

fight yesterday’s or today’s wars. 

We also do not want to artificially adjust the mix of hot and 

multi-mission combatants and focus low-end mission ships exclusively based on costs. In many respects, this is the history of the 

convoluted DDG 21, DD(X), DDG 1000 program. Consideration 

must be given to both the future operating environment and to economics. 

To that end, I want to hear more about the analysis the Navy 

has done regarding future mission sets. If we do not build five 

more DDG 1000s, what risk are we assuming? What will our Navy 

not be able to do? 
6 

In the past, we have been told that the DDG 1000 will be significantly more stealthy, which will be necessary for ship self-defense 

and to improve the ship’s land-attack mission. We were also told 

that the Navy needed to reduce ship’s manning. DDG 1000 has an 

estimated crew size of less than half that of the DDG 51. We were 

told that the introduction of an integrated power system would improve ship survivability, reduce fuel consumption, and open the 

door for a new directed energy weapons systems. 

What is to be the fate of these technologies and the investments 

we have made? Are these factors no longer as important as others? 

There are many other issues than these to consider, but I am 

eager to learn from our witnesses and give Members an opportunity to ask questions. 

I remind witnesses that we value and respect your opinions. All 

we ask is you lay out the true warfighting requirements and be 

clear about what risk we must accept with the funding choices we 

will have to make. 

Thank you, Mr. Chairman. 

Mr. TAYLOR. Thank you, Mr. Bartlett. 

Given the nature of today’s hearing, that this is as much a hearing as a tutorial from the Navy to this subcommittee, I am going 

to recommend to the subcommittee that we waive the 5-minute 

rule for our first two witnesses and allow them to speak for 10 minutes and that for the additional speakers on the second panel, that 

we give them 7 minutes. 

So without objection, so ordered. 

It is my understanding, Admiral, that you wish to speak for both 

you and Ms. Stiller. 

The Chair recognizes Admiral Barry McCullough for 10 minutes. 

STATEMENT OF VICE ADM. BARRY MCCULLOUGH, USN, DEPUTY CHIEF OF NAVAL OPERATIONS FOR INTEGRATION OF 

CAPABILITIES AND RESOURCES; ACCOMPANIED BY ALLISON 

STILLER, DEPUTY ASSISTANT SECRETARY OF THE NAVY, 

SHIP PROGRAMS 

Admiral MCCULLOUGH. Chairman Taylor, Ranking Member 

Bartlett, and distinguished Members of Congress, I am honored to 

appear before you with Ms. Stiller to discuss the Navy’s surface 

combatant plan. 

I request our written testimony be entered into the record. 

The Navy’s plan to truncate the DDG 1000 program at two ships 

and reopen the DDG 51 line best aligns our surface combatant investment strategy to meet Navy and combatant commander 

warfighting needs. 

The reason for the change to the Navy’s DDG plan is to prioritize 

relevant combat capability. In this plan, the Navy addresses the 

changing security environment, the dynamic capability of the fleet, 

and provides for maximum stability for the industrial base. 

Modernizing the fleet’s cruisers and destroyers and executing an 

affordable shipbuilding plan are crucial to constructing and maintaining a 313-ship Navy with the capability and capacity to meet 

our country’s global maritime needs. 

The new Navy plan is based on requirements and needed 

warfighting capability and capacity. The first two DDG 1000s will 
7 

be completed as planned and additional DDG 51s included in the 

Navy’s shipbuilding program. This proposed decision has acquisition and industrial base implications. 

We face a growing proliferation of ballistic missiles and anti-ship 

cruise missiles that demand greater integrated air and missile defense capability. Anti-submarine warfare, anti-ship cruise missiles, 

and theater ballistic missile gaps pose increased risk to our forces. 

Non-state actors who in the past have posed low-tech threats are 

expanding their reach with improved high-end capabilities and advanced anti-ship cruise missiles. 

The revised DDG plan enhances ballistic missile defense, integrated air and missile defense, and anti-submarine warfare to 

crown our growing anti-access strategies. The demand from combatant commanders is for ballistic missile defense, integrated air 

and missile defense and anti-submarine warfare best provided by 

DDG 51s and not the surface fire support optimized in DDG 1000. 

The Marine Corps supports the Navy’s position on DDG 1000, 

just as the Navy remains firmly committed to Marine Corps and 

joint and combined force clearly stated surface-fires requirements. 

These Naval surface fire requirements can be met with existing 

precision strike capability from tactical Tomahawk, improved aircraft delivered precision munitions, and current surface combatants. 

Additionally, the Navy is researching capability to extend the 

range of current surface guns to meet ship-to-objective maneuver 

required ranges. The Navy-Marine Corps team has initiated an indepth review to look at how surface-caught fire capability fits into 

the Littoral Combat Ship. DDG 1000 does not provide area air defense or ballistic missile defense. 

Beyond addressing the capability requirements, the Navy needs 

to have the right capacity to meet combatant commander 

warfighting requirements and remain a global deterrent. Combatant commanders continue to request more surface ships and increased Naval presence to expand cooperation with new partners in 

Africa, the Black Sea, the Baltic region and the Indian Ocean. This 

is in addition to the presence required to man our relationships 

with current allies and partners. Therefore, the Navy must increase surface combatant capacity to meet combatant commander 

demands today for ballistic missile defense, theater security cooperation, and steady-state security posture, simultaneously developing our fleet to meet future demands. Africa Command capacity 

demands will not mitigate growing European Command requirements and Southern Command has consistently required surface 

combating presence that in the majority goes unfilled. The Navy remains committed to our ballistic missile defense partners around 

the globe, including Japan, Korea, the Netherlands and Spain. 

The 30-year shipbuilding plan was designed to field a force structure based on the fiscal year 2020 requirements of the National Security Strategy and the Quadrennial Defense Review. The 313-ship 

force floor represents the maximum acceptable risk in meeting the 

security demands of the 21st century. 

In the balance of capability and capacity, the Navy has found 

there are increased capability gaps, particularly in integrated air 

and missile defense and ballistic missile defense, as we continue to 
8 

review our Force Structure Plan in support of the developing fiscal 

year 2010 program objective memorandum. 

The DDG 1000 is a capable ship which meets the requirements 

for which it was designed. There are 10 promising major technologies in the DDG 1000 program that have potential utility but 

have yet to be assessed in operational environments. Completing 

the two ships under contract will allow that assessment, most importantly, that of the new hull form, low radar cross-section, dualband radar, and minimal manning initiatives. There will be an impact to DDG 1000 prime contractors and secondary and tertiary 

suppliers. Developmental costs, which make up a significant investment in DDG 1000, specifically the total ship computing environment and dual-band radar, will still be incurred to ensure we acquire usable products from the DDG 1000 effort that we are incorporating in the CVN–78 class and can leverage in future shipbuilding programs. 

The next generation cruiser, referred to as CG(X), will be an air 

and missile defense battle space dominant ship and is being developed to counter the increasingly difficult missile threats we face 

and project. The technologies resident in the DDG 51 provide extended range air defense now and, when coupled with open architecture initiatives, will best bridge the transition to the enhanced 

ballistic missile defense and integrated air and missile defense capability envisioned in the CG(X). 

We believe this evolutionary path is correct and addresses the capability gaps more quickly than maintaining the DDG 1000 program beyond the first two ships. Additionally, production costs for 

DDG 51 are quantifiable. 

Your Navy remains committed to building the fleet of the future 

and modernizing our current fleet to meet increasingly complex 

threats. Continuing to build DDG 51s enables us to expand 

warfighting capability, reach the required 313-ship force structure 

sooner and, with the technology demonstrated in DDG 1000 and 

DDG 1001, best bridge to CG(X). 

Within the constrained shipbuilding resources available to the 

Navy, evolutionary improvement of existing proven capabilities 

must take priority to restrain the decline in size and relevant combat capability of the fleet. 

If you will now refer to the two ship charts you have been provided, I will compare the warfighting capability provided by DDG 

51 and DDG 1000. 

[The charts referred to were not available at the time of printing.] 

Admiral MCCULLOUGH. DDG 1000 is an approximately 15,000- 

ton guided missile destroyer with a maximum speed of approximately 30 knots and a cruising endurance of approximately 4,500 

nautical miles at 20 knots. It has the dual-band radar, consisting 

of the S-band volume search radar and the X-band multi-function 

radar. It has a vertical launch system capacity of 80 cells and is 

capable of self-defense, anti-air warfare capability with the enhanced Sea Sparrow missile. The vertical launch system (VLS) also 

provides long-range land-attack capability with tactical Tomahawk. 
9 

DDG 1000 has 2 advanced gun systems, 6-inch caliber with a 

magazine capacity of 600 rounds and a firing range of approximately 63 nautical miles with a long-range land-attack projectile. 

DDG 1000 anti-submarine capability consists of a dual-frequency, bow-mounted active sonar, a multi-function towed array 

passive sonar, a torpedo countermeasure system, and a vertical 

launch anti-submarine rocket. It has a helicopter hangar and is capable of operating two H–60 helicopters or one H–60 aircraft with 

three vertical take-off unmanned aerial vehicles. 

By comparison, the DDG 51 is a 9,600-ton guided missile destroyer with a similar maximum speed of approximately 30 knots 

and an endurance range of 4,500 miles at 20 knots. It has the 

SPY–1D(V) radar and a vertical launch system capacity of 96 cells 

and is capable of a sea-based defense area anti-air-warfare capability with SM–2 standard missiles. 

Additionally, it can provide ballistic missile defense capability 

with the SM–3 interceptor. The VLS also provides long-range landattack capability with tactical Tomahawk. 

The DDG 51 has one Mark 45 gun, 5-inch caliber with a magazine capacity of 550 rounds and a firing range of approximately 13 

nautical miles. DDG 51 anti-submarine warfare capability consists 

of the SQQ–89 combat system with a triple frequency bow-mounted 

active sonar, multi-function towed array passive sonar, a torpedo 

countermeasure system, 6 torpedo tubes, and a vertical launch 

anti-submarine rocket. 

It has a helicopter hangar and is capable of operating two H–60 

aircraft. 

The fuel usage for DDG 51 is approximately 30 percent less than 

that projected of the DDG 1000 under the same operating conditions. 

In summary, specific capability differences include: DDG 1000 

was designed to be optimized in a littoral environment and is expected to meet the challenges it would face in that environment in 

most cases more effectively than would the DDG 51. The dual-band 

radar has better capability in a high-clutter environment and the 

low-power, high-frequency sonar is more effective in shallow water 

reverberation-limited environments. However, as currently configured, the DDG 1000 cannot perform area-air defense and is incapable of conduction ballistic missile defense. In addition, though significantly quieter and superior in littoral anti-submarine warfare, 

DDG 1000’s lower power sonar is less effective in active blue-water 

anti-submarine warfare prosecutions than is the case for the DDG 

51. 

The future threat, particularly from proliferated ballistic missiles 

and advanced anti-ship cruise missiles, can be better addressed by 

the DDG 51. Modifying the DDG 1000s to support these missions 

is unaffordable from the Navy’s standpoint. Given the range of missions assigned to the Navy in the future, the technical complexity 

of the threats we are to face, and the relevant likelihood we will 

be called upon to execute these missions, the greatest single threat 

is the proliferation of advanced ballistic missiles followed by a burgeoning deep water quiet diesel submarine capability by potential 

adversaries. 
10 

The future Navy will have to address these threats first, and 

today, the DDG 51 presents more capability in these areas than 

does the DDG 1000. It is particularly critical that the Navy receive 

authorization of full funding for restart of DDG 51 in fiscal year 

2009 to support our proposed fiscal year 2010 program objective 

memorandum and for the continuation of DDG 1000 essential efforts. 

In the interest of time, I was unable in this opening statement 

to answer specifically all of the questions posed in your letter dated 

25 July to Secretary Winter. 

Ms. Stiller and I look forward to addressing your concerns regarding mission capability, cost analysis, industrial base and DDG 

51 modernization. Thank you to each one of you and to the Congress for supporting the United States Navy. 

[The joint prepared statement of Admiral McCullough and Ms. 

Stiller can be found in the Appendix on page 64.] 

Mr. TAYLOR. Thank you very much, Admiral. 

And thank you, Ms. Stiller, for being here. 

I would like to remind all interested parties that the purpose of 

this hearing was to clear the air between the DDG 1000 and DDG 

51, and that each of the contractors involved was given the opportunity to participate in the hearing as far as being witnesses. 

Again, I want to remind people that we invited any Senator who 

wished to participate. And so the people who are on the witness 

stand are those who chose to participate today. But we want to 

make it perfectly clear that we have given everyone on each side 

of this debate ample opportunity to say their piece. 

The Chair now recognizes the gentleman from Maryland, our 

ranking member, Mr. Bartlett. 

Mr. BARTLETT. Admiral, you kept referencing the anti-submarine 

warfare capabilities of the DDG 1000 and its capability in the 

littorals. How far along was the design of the DDG 1000 before 

LCS came on the scene? 

Ms. STILLER. From a budgetary perspective, we have had R&D 

for DDG 1000—it was not DDG 1000 at the time; it was DDG(X)— 

since fiscal year 1995. LCS is about 2002 time frame. I think I 

have that right. 

Mr. BARTLETT. You kept emphasizing that if we truncate the 

DDG 1000 line and go to the DDG 51, that we will have less capability in anti-submarine warfare and in the littorals. But wouldn’t 

the number of LCSs that we are planning more than compensate 

for that? 

Admiral MCCULLOUGH. The LCS has an anti-submarine package, 

Congressman, and it utilizes remotely piloted vehicles, active and 

passive towed arrays and helicopter support. 

We have also worked for a distributed system development that 

I would have to take into a closed hearing. 

But the LCS ASW mission module provides very, very good antisubmarine capability in the littoral. What I was trying to compare 

here was the capability resident in the DDG 1000 as compared to 

the DDG 51. 

Mr. BARTLETT. I understand, in 1995, when we started the conceptual design of the DDG 1000, had we known that the LCS was 
11 

coming along, the 1000 might have been a very different ship, 

might it not? 

Admiral MCCULLOUGH. I would be speculating if I answered that 

question, Congressman. I wasn’t in the Pentagon when those decisions were made. 

I will tell you, we developed a littoral combat ship for operations 

in the littoral, and as we have looked at the evolution of the threat 

over the past several years, it is more in the blue-water region for 

anti-submarine warfare, as recently demonstrated in the Western 

Pacific. 

Mr. BARTLETT. From 1995 on, operation in the littorals became 

more and more a priority, and it resulted, of course, in the design 

of a whole new class of ships, the LCS. I think that is an important 

element in the Navy’s decision to truncate the 1000 line and to 

build more 51s because a major focus of the 1000, the littorals and 

anti-submarine warfare, is now I think more than adequately done 

by the LCS in its missions there. This is just one of the several considerations that the Navy used in a decision to truncate the 1000 

line and to move to the 51. Also, and we do not know the final cost 

on either of these, but the 51 is certainly going to cost less in most 

people’s projections than the 1000, and so will this move us more 

quickly to a 313-ship Navy? 

Admiral MCCULLOUGH. Yes, sir, it will. 

Mr. BARTLETT. Thank you very much, Mr. Chairman. 

Mr. TAYLOR. The Chair now recognizes the gentleman from Connecticut, Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

First of all, I just wanted to say that I think the record should 

reflect that this hearing was actually scheduled before the Navy’s 

announcement on July 24. 

And I think Mr. Taylor and Mr. Bartlett deserve a lot of credit 

for the fact that they have really been on top of this issue, and this 

committee has been doing a very credible job of oversight on this 

program, and I think that should be noted. 

I want to follow-up on Mr. Bartlett’s last question. When the 

Navy issued its statement on the 24th, it actually said that the 

313-ship level would be reached sooner, and you just testified that 

it would. My recollection is when Admiral Roughead appeared before the committee earlier this year, he had pushed back the projection for a 313-ship Navy to I think 2019 was my recollection. 

Admiral MCCULLOUGH. Yes, sir, I believe that is correct. In accordance with the shipbuilding plan, it was presented to Congress 

with the President’s Budget Request for fiscal year 2009 (PB09) 

submittal. 

Mr. COURTNEY. So can you say with any more specificity about 

whether this decision will change that date? 

Admiral MCCULLOUGH. Yes, sir, we believe it will. The plan that 

we played out is a proposal in our POM submittal to the Office of 

the Secretary of Defense (OSD), so this is still being worked within 

the Defense Department. 

My initial estimates—and I have my people working the shipbuilding plan; it will be submitted to Congress—is that we will be 

able to achieve the 313 plan approximately 2 years earlier. 
12 

Mr. COURTNEY. In your opening statement, you said that one of 

the goals of this change is to, I wrote it down real fast here, is to 

maximize industrial base stability, was part of the decision. This 

is not one of my yard’s vessels, but my understanding is that the 

1000 requires more shipyard workers than the 51. How do you envision maintaining that stability? 

Ms. STILLER. We are still in the process of defining an acquisition 

strategy going forward, and we will be working with the Secretary 

of Defense’s Office on that. Certainly, industrial-based considerations must be weighed in that acquisition planning, and we will 

do that. 

Mr. COURTNEY. I am sure there may be some follow-up questions 

to that point later. 

I guess my last question is that, Admiral, you testified that you 

are hoping that the Congress is going to act in the 2009 budget to 

sort of begin implementing this change. I think that is how you finished your testimony; is that right? 

Admiral MCCULLOUGH. Sir, what I would say is, this is a Program Objective Memorandum (POM) plan. And as one of the gentlemen referenced, our proposal is for eight DDG 51s in the fiscal 

year 2010 program, from fiscal year 2010 through fiscal year 2015. 

We believe to enable that program a President’s Budget Request 

for 2009 (PBO9) adjustment to make it DDG 51 in fiscal year 2009 

supports our POM–10 submittal. And that is what we would like 

to see happen, yes, sir. But that is in support of our POM–10 submittal, sir. 

Mr. COURTNEY. So what happens if we don’t do that? I guess I 

am trying to sort of play this out a little bit, because it is kind of 

late in the process. 

Admiral MCCULLOUGH. Yes, sir, we understand that. 

What I would say is—Allison, when was the last year we started 

building the DDG 51s? 

Ms. STILLER. The last DDG 51 was appropriated in fiscal year 

2005, and so the point Admiral McCullough I think is trying to 

make here is, you would have a significant production break if you 

wait until fiscal year 2010. So the desire is to consider in 2009 as 

well. So that is part of the discussion we are having. 

If your question is if another DDG 1000 was authorized and appropriated, from an acquisition perspective, I have an approved acquisition strategy for the 1000 program as well. Surface combatant 

in fiscal year 2009 is critical, we believe, to the industrial base. 

Mr. COURTNEY. Thank you. 

I have no further questions, Mr. Chairman. 

Mr. TAYLOR. The Chair recognizes, again, given the unanimous 

consent request, the Chair now recognizes Mr. Saxton. 

Mr. SAXTON. Thank you, Mr. Chairman. 

Admiral, during your testimony, you, I believe, said that the 

DDG 1000 had some advantages as compared to the DDG 51 and 

that the DDG 51 had some advantages as compared to the DDG 

1000. I think you indicated that the DDG 1000 had some advantages in the littoral environment, and that it had an advantage 

with the dual-band radar, and it had an advantage in shallow 

water, sonar in shallow water. 
13 

At the same time, you indicated that DDG 51 had some advantages in air-to-air defense, in ballistic missile defense, in anti-ship 

missile defense, in anti-submarine defense in deep water. Did I get 

that all? Is that a synopsis of what you said? 

Admiral MCCULLOUGH. Yes, sir, that is a fair assessment. The 

dual-band radar has both and S- and an X-band radar capability. 

And that works very well in the cluttered environment of the sea/ 

shore interface. 

Mr. SAXTON. Here is the question that I wanted to ask. Members 

of this subcommittee and members of the full committee have followed very closely the evolution of DDG 51. I did myself, and I saw 

it as a new system in the 1980’s with capabilities that were different, much less capable than the Aegis system today. And I followed that evolutionary path until very recently DDG 51 with the 

missile technology. The anti-missile technology that it has was able 

to take a satellite out of the atmosphere. 

Admiral MCCULLOUGH. Yes, sir. 

Mr. SAXTON. And that was quite a learning curve over a long period of time and evolutionary developments that took place that 

gave us capabilities today that nobody else presumably in the 

world has, a package of capabilities. 

So I guess this is my question: If DDG is not as good as 1000 

in the littoral environment and if it is not as good in the dual-band 

radar component, which I don’t fully understand, I must admit, 

and if it is not as good in the sonar department in shallow water, 

how will we meet these three—how will DDG and other Naval assets be able to meet these requirements? 

Admiral MCCULLOUGH. I will address the ASW first, sir. As was 

suggested, the LCS has quite good capability in the littoral environment from an anti-submarine warfare perspective, both from an 

active and passive and a combination of the two use of sonars and 

distributed systems. So we think we have that challenge met with 

the ASW portion of the LCS. 

The dual-band radar was specifically designed to function at the 

sea-land interface in a clutter environment. What I would tell you 

is it does very well there. It does exactly what we designed it to 

do, and that is because of the combination of the X-band and the 

S-band. 

As initially configured, and as you suggest, the SPY–1A in the 

early 1980’s did not do well in the sea-land interface. And we have 

evolved that radar from a SPY–1A to a SPY–1B to a SPY–1D(V). 

And the SPY–1D(V) is capable and can meet the threats in the littoral environment. 

And as you also suggest, we have evolved that radar to where 

it can shoot down satellites in outer space if that is what we so desire. It wasn’t designed for that. It wasn’t designed for ballistic 

missile defense, but we have evolved that system to meet that capability set. 

Now, granted, the system, the SPY system, the Aegis system is 

not designed to shoot down satellites, and that was a one-time 

event, but it is configured to track and engage ballistic missiles. 

People ask me what the accuracy of the thing is, and I will tell 

you, we can pick where on the short- and medium-range ballistic 

missiles we want to hit the target, and that is how accurate it is. 
14 

So I think, with the combination of capability with the LCS and 

the capability resident in the DDG 51, we meet the littoral challenge. I think that is where we are. 

Mr. SAXTON. Mr. Chairman, if I may just follow up with one 

quick. 

The shallow water sonar, is there a come-along to take up that 

capability? 

Admiral MCCULLOUGH. Yes, sir. The LCS ASW mission package 

has the shallow water active and passive sonar capability. And I 

believe we roll the first ASW package out in September or October 

of this year. 

Mr. SAXTON. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair recognizes the gentlewoman from Massachusetts, Ms. Tsongas. 

Ms. TSONGAS. Thank you, Mr. Chairman, for allowing me to participate in this important hearing and for your continued leadership to make our shipbuilding more effective and affordable. 

Admiral, I have a long question. Please, if you would, bear with 

me before answering. 

Admiral McCullough and Ms. Stiller, you have both testified before Congress this year on the fiscal year 2009 budget and, in particular, on the DDG 1000 program. I would like to read a couple 

of your statements. 

In April, Admiral McCullough, at the Senate Armed Services 

Committee Seapower Subcommittee hearing, you said, ‘‘It is, the 

DDG 1000, much more capable in the littoral, given the radar suite 

that we put on it, the signature reductions we have put into the 

ship, and it has got less than half the crew size on it.’’ 

In March of 2008, Admiral McCullough and Ms. Stiller, in your 

testimony before this subcommittee you said, ‘‘The DDG 1000 will 

capitalize on reduced signatures and enhanced survivability to 

maintain persistent presence in the littoral and future scenarios. 

The program provides the baseline for spiral development to support future surface ships. The dual-band radar represents a significant increase in air defense capability in the cluttered littoral environment. Investment in open architecture and reduced manning 

will provide the Navy lifecycle cost savings and technology options 

that can be retrofit to legacy ships, thus allowing adaptability for 

an uncertain future. The program continues to execute on cost and 

on schedule.’’ 

In March of 2008, in a hearing before this committee, ‘‘The DDG 

51 is a very capable ship. That is true. I will tell you the capability 

that we put in the DDG 1000 with performance in the littoral, both 

against missile threats and to provide surface-fire support, exceeds 

the capability and the capacity that is resident in a DDG 51.’’ 

And Ms. Stiller, at the same hearing, ‘‘And I would also add that 

the fleets do have input as we go through our budget cycles and 

what the requirements are.’’ 

Today, obviously, you see a changed threat environment. Nevertheless, given all your testimony just three to four months ago regarding the great warfighting capabilities the ship delivers against 

current and future threats and its capabilities that ‘‘exceed capability resident in the DDG 51,’’ do you stand by the testimony that 

you made before Congress so recently? 
15 

Admiral MCCULLOUGH. Ma’am, I would say everything that I 

said in my testimony, and I don’t want to speak for Allison, remains. 

The DDG 1000 is absolutely outstanding for the requirements to 

which it was designed. The dual-band radar is better than the 

SPY–1D(V) radar in the cluttered littoral environment at the sea/ 

land interface. The 155 gun, the 6-inch gun, has a longer range and 

a better fire-support capability than a 5-inch gun. 

The total ship’s computing environment that I referenced again 

today is something we need to go forward with as we develop different combat systems, and we need that to complete the first two 

ships. The dual-band radar goes on CVN–78. I wouldn’t change 

anything I said in that testimony. In that environment, the DDG 

1000 outperforms the DDG 51. 

Now when I look at developing multi-mission surface combatants 

that are filling a unique role that is aligned to one particular mission, which is fire support, and I look at the global change in the 

security environment, I have to look at where I think the capabilities should go. And the capability resident in the DDG 51 with respect to advanced anti-ship cruise missiles and ballistic missile defense better suits the capability challenges we see today. 

Ms. TSONGAS. Before I go on to ask a question about the sudden 

shift in thinking around what the threat is, Ms. Stiller, you said 

that it is important that we do buy a surface combatant in fiscal 

year 2009. Given what the House Appropriations Defense Subcommittee did yesterday with $450 million for advanced procurement, no money for the DDG 51 procurement, and the fact that the 

Senate equivalent is likely to be friendlier to the DDG 1000, I am 

not sure where the funding for a DDG 51 is going to come from. 

Would you support funding for an additional DDG 1000 instead of 

no surface combatant in this year? 

Ms. STILLER. Ma’am, as you know, our President’s budget submission for 2009 included DDG 1000. And yes, Admiral 

McCullough said in his opening statement, we are here today to 

talk about where the Navy is headed and as part of our POM–10 

submission to the Office of the Secretary of Defense (OSD). 

So, from an execution perspective, yes, ma’am, I can execute a 

DDG 1000 in fiscal year 2009, but it comes back to a requirement 

decision; does the Department support and need that ship? But 

from an acquisition perspective, yes, ma’am, I absolutely could execute either way. 

Ms. TSONGAS. And then I have one more question for you, Admiral. This isn’t the first major ship acquisition program that has 

faced problems. Why does so much risk and inconsistency exist? Is 

this a problem with the threat assessment, or is it a budgetary 

issue? And what can we do to mitigate these problems? 

Before you answer, I appreciate that we must be flexible, and I 

appreciate that you are under great constraints when you testify, 

but shifting testimony in such a short period of time makes it very 

difficult for us as a Congress to authorize and appropriate funding 

for long-term programs in an effective and efficient way. 

So how do we address this so that the process is fairer for the 

Navy, for the industrial base, and the taxpayer? 
16 

Mr. TAYLOR. Ms. Tsongas, again, we are trying to clear the air, 

but you are over your five minutes. 

So, Admiral, if you could give us as timely response as you could. 

Admiral MCCULLOUGH. Yes, Sir. 

Yes, ma’am, I understand the question. There have been some 

things that have happened in the near-recent past that have significantly changed the way we view the threat. Some of it I would 

have to talk to you offline about due to the classification level of 

it. 

But if you look at recent ballistic missile demonstrations or tests 

by potential adversaries, they have advanced greatly since even 

2000. And then if you look at an event that occurred in the IsraeliHezbollah war where we used to attribute high-end or high-tech 

threats to nation-states, that would now affect our ability to perform what we previously viewed as operations in low-threat environments into a high-tech, high-threat environment. And so this is 

a requirements and capability issue based on the way we have seen 

the threat adjust over the past couple of years. 

We started working on this about four and a half or five months 

ago, and I understand and appreciate the dilemma for the Congress. But the Navy felt that this was the right way to go based 

on the capability that we see we need to meet current and future 

threats. 

Mr. TAYLOR. Thank you, Admiral. 

Thank you, Ms. Tsongas. 

The Chair, again, is going to recognize Members in the order 

that they were here at the gavel, and then we will go back to Democrat and Republican. 

The next person who was here at the time of the gavel is Mr. 

Allen from Maine. 

Mr. ALLEN. Thank you, Mr. Chairman. And I appreciate very 

much the chance to be here and welcome members of the panel. 

Bath Iron Works in my district only builds surface combatants, 

so it has—and it was, my understanding was the third DDG 1000 

was intended to go to Bath Iron Works. So this debate means a 

great deal to the people who work there, to the company, and everyone who is connected to that particular yard. 

Both the CNO and the Secretary of the Navy have been to the 

yard. They have seen the new ultra-hull facility. They have talked 

about how important Bath Iron Works is to the shipbuilding industrial base in this country. 

Ms. Stiller, I think you said that when you figure out the acquisition strategy, the industrial base considerations will play a role. I 

would ask either or both of you to speak to the role you see for that 

particular yard as part of the Navy’s shipbuilding base going forward? 

Ms. STILLER. Yes, sir. 

Bath Iron Works is producing surface combatants for the United 

States Navy; specifically, still building the DDG 51 class and the 

lead DDG 1000 with some work also for the second 1000. There is 

a work-share agreement between Northrop Grumman Shipbuilding 

and General Dynamics Bath Iron Works. 

Yes, sir, the Secretary has seen the ultra hull facility. I have 

been up there recently. That was an investment done through the 
17 

DDG 51 program to help improve efficiencies in the 51 program. 

Certainly the yard has improved efficiencies over time. 

We will weigh industrial base considerations as we go forward in 

our acquisition strategy formulation. So I guess I can assure you 

that we will be considering that as we move forward. But I don’t 

have specifics yet, because we are still in the developmental phase. 

Mr. ALLEN. I understand, Ms. Stiller, that both yards have indicated to you that a restart of the 51 program in fiscal year 2009 

can be executed. 

Ms. STILLER. Yes, sir. As a result of my hearing this spring before this committee, Chairman Taylor asked me to talk with industry, because I had said I was concerned about the subvendor implications of returning to DDG 51. Both yards came in to meet with 

me. They had pulsed the subvendor base. 

Now, I will tell you their assumption was the DDG 1000 continued and that the 51 would restart. The major issue that they identified to me was a long lead time for the main reduction gear, 

which would be about 50 weeks longer than what we have traditionally seen in reduction gear fabrication. Both yards assured me 

that since they had done main reduction gear repairs, significant 

disruptive industrial events, they have both done those in the recent past, they felt that if they understood that they were going to 

have to build out a sequence, they could plan for it and execute. 

And I believe knowing that they have done that in the past and 

they could plan in the future that, yes, sir, they could restart in 

2009. 

Again, they were in their assumptions, I am being truthful here, 

is that they did assume the 1000 class continued. 

Mr. ALLEN. Admiral, I had one more question. As I heard you describe the capabilities of the 1000 and the capabilities of the 51, it 

struck me that what you were really saying is that the Navy’s understanding of the national security needs of this country, particularly how we respond to future threats, has changed based on evolution and threats both in submarines built by potential adversaries and also by the development of new missiles, both cruise 

missiles and ballistic missiles. And I just was struck also in your 

written testimony how often you referred to the demands of the 

combatant commanders. And I wonder if you would elaborate just 

a little bit on that fact. What kinds of requests are you getting 

combatant commanders and how has that affected your decision? 

Admiral MCCULLOUGH. As we reviewed the integrated priority 

list from the combatant commanders that were submitted this 

year, European Command (EUCOM) asked for increased air and 

missile defense. Pacific Command (PACOM) asked for enhanced 

ballistic missile defense. And Central Command asked for integrated air and missile defense. And I would have to get the lists; 

I don’t have them in front of me. I believe PACOM asked for improvements in anti-submarine warfare. And as we looked at that, 

that sort of aligned with where we viewed the national security environment was going. 

I would also tell you that EUCOM is coming in for a request for 

a 1.0 presence ballistic missile defense in the eastern Mediterranean. There has been some discussion in policy about putting that 

capability in the Baltic region. And Central Command has a stand-
18 

ing request for forces for 1.0 presence for exo-atmospheric shooters, 

SM–3 shooters, and endo-atmospheric shooters, SM–2 block IV 

shooters, which is a near-term sea-based terminal. They have that 

standing requirement, as does PACOM, have a standing requirement for almost every ballistic missile defense asset we can put in 

that theater, sir. 

Mr. ALLEN. Thank you. 

Thank you both. 

Mr. TAYLOR. The Chair thanks the gentleman. 

And the Chair would also like to make a request of Admiral 

McCullough. 

Admiral, included in next year’s budget request, I would like the 

Navy to submit a cost estimate of what it would take when the 

first of the DDG 51s hit 20 years, what a service life extension program would cost to get those vessels electronically and weaponedwise up to speed with the next 51s to come off the line. 

Admiral MCCULLOUGH. What I would tell you, sir, is DDG 51 

made its first deployment in 1991. So she was commissioned in late 

1990 or early 1991. So she reaches 20 years in fiscal year 2011. 

We put in a DDG modernization package as part of the President’s Budget Request for 2008 (PB08) that was approved by the 

Congress to modernize not only the hull, mechanical, and electrical 

systems on that ship, of those ships, to get them to their full service lives, but to upgrade the combat systems capability, because as 

Congressman Bartlett indicated, if we don’t—or maybe it was you, 

sir—if we don’t get the ships to be able to upgrade to meet the 

threat, we decommission them. And we did. We decommissioned 

the Baseline One cruisers at about 20 years; the Spruances at 

about 22; and the new threat upgrade DDGs, 993 Kidd class, at 17 

years because we couldn’t upgrade the combat capability in them. 

And the upgrade packages we have in the combat systems, starting 

for the DDG 51, is something we call Advanced Capability Build 

12. And that is a technical insertion of commercial off-the-shelf 

(COTS)-based computer hardware, and it is an open architected 

computer program that is developed around a projected architecture. And it gives the ships in-stride ballistic missile defense, the 

ones that don’t have it, with multi-mission signal processors, and 

upgrades to the original radar that was put on the first ships, the 

SPY–D(V) capability, and it also puts in integrated air and missile 

defense with the cooperative engagement capability that isn’t resident in that class of ships now and provides for increased extended 

range area air defense with SM–6s. And the cost of that whole upgrade, I believe, as submitted in the 2008 budget submittal was 

about $215 million a ship. 

And we need to get to the open architecture computer environment so we can have an open architecture business base that allows competition for program algorithms and hardware updates, 

because we can’t afford to upgrade these ships again 10 years after 

their current mid-lives at a cost of $200-plus million a ship. And 

so that is where that program is. And I can give you more details 

on that as you desire, sir. 

Mr. TAYLOR. Admiral, for the record, I think that is very important. Additionally, given the advances in cathodic protection and 

metal coatings and what not, I think it would be very much to the 
19 

committee’s interest as to, what are the possibilities of actually extending the life of some of these 51s out to 40 years? 

Admiral MCCULLOUGH. Yes, sir, I can do that. We commissioned 

a study by Naval Sea Systems Command (NAVSEA) to get the 

ships to 40 years already, because, as I look at the outyear plan 

and the shipbuilding plan, I understand how expensive it is. And 

NAVSEA came back to me with that report. And there are no show 

stoppers to get those ships to 40 years estimated service life (ESL). 

Mr. TAYLOR. Thank you very much, sir. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Admiral McCullough, you have spoken a little bit about the differences in capabilities of the DDG 51, the DDG 1000, the surface 

combatant commanders’ requests and what their needs are. I want 

to kind of back up a little bit and talk in a broader framework as 

far as the threats that this Nation faces and in the Navy’s vision 

of its mission needs. And can you tell us a little bit about that and 

how that has led you to the point of restarting DDG 51? How has 

the Navy’s vision of the mission changed? And if you can speak a 

little more specifically about the Navy’s role in providing ballistic 

missile defense and also Naval surface fire support and how those 

elements relate to the Navy’s maybe change in thought about how 

the DDG 51 meets those requirements versus the DDG 1000. 

Admiral MCCULLOUGH. Yes, sir. I will speak to that. 

As we look at threat sets both from developing nations and nations that used to be constrained to regional operations, the proliferation of ballistic missiles is substantial. So that is a problem. 

And we have recognized that over the last several years, starting 

in the late 1990’s or the early 2000’s, when the Missile Defense 

Agency took auspices of capability development out of the services 

and under the agency. Prior to that time, the Navy had something 

known as the Navy Area Wide Program. So we were already embarked on what we saw an evolving threat with the proliferation 

of ballistic missiles. 

Working with the Aegis Ballistic Missile Defense Directorate inside the Missile Defense Agency (MDA), the Navy has conducted 

successfully 12 of 14 engagements of medium-range and shortrange ballistic missile targets out at the Pacific Missile Range Facility. We have also modified the program with the help of Lockheed Martin engineers, Raytheon engineers, the Naval Surface 

Weapons Center in Dahlgren, and the Navy, and executed a shoot 

down of an errant satellite because of the hazardous material that 

was in the fuel tank. 

The most recent exercise off of Kauai in November of 2007 was 

conducted, as we do all of them, the ship’s crew is on watch; it is 

not engineers. It is not specified folks. It is folks on a watch bill, 

without knowledge of when the target is going to be launched, and 

they launched two simultaneous short-range ballistic missiles, and 

they were successfully intercepted by Lake Erie. 

So we have the capability to conduct intercept operations today 

with the Aegis Ballistic Missile Defense Program 3.6 or 4.0. That 

capability is deployed in the Western Pacific and contributes to the 

larger ballistic missile defense system architecture that has been 
20 

engineered by MDA to provide warning for rogue nation ballistic 

missile launches. And it is on station and operational today, and 

the combatant commanders want more of it, sir. 

Mr. WITTMAN. Thank you. 

Mr. Chairman, one additional question. When the DDG 51s were 

in production, there were a minimum of three DDG 51s produced 

per year. And past studies have indicated that the shipbuilding industry needs to produce at least three of those surface combatant 

ships a year in order to sustain the industrial base. Now, with this 

change in direction from the DDG 1000 to the DDG 51, does the 

Navy plan in future budget requests to request the production of 

at least three DDG 51s per year into the future? 

Admiral MCCULLOUGH. Sir, what we have proposed to OSD as 

we have worked through this plan is eight ships across the fiscal 

year 2010 Fiscal Year Development Plan (FYDP). And the profile 

as proposed, and not approved yet by OSD, is one ship in fiscal 

year 2010; two ships in 2011; one in 2012; two in 2013; and one 

in 2014 and 2015. As we build subsequent programs in the years 

to come, we will look at that issue that you just laid out. But I 

would tell you right now, based on competing demands within the 

Department, that is what we laid in the POM–10 submittal to 

OSD. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Mr. TAYLOR. I thank the gentleman. 

The Chair intends to recognize in the following order: Mr. Langevin, Mr. Ellsworth, Mr. Sestak, Ms. Gillibrand, and Mr. Cummings. If our minority members wish to be recognized along the 

way, just let me know. 

The Chair now recognizes Mr. Langevin for five minutes. 

Mr. LANGEVIN. Thank you, Mr. Chairman. 

And I want to thank you for your courtesy in allowing me to 

come back on the committee for this hearing, as I am on leave from 

the Armed Services Committee, on the Intelligence Committee 

right now. 

Admiral, I want to thank you for your testimony. 

Ms. Stiller, thank you for being here as well. 

Let me just say that I am certainly concerned about the quick 

shift in strategy, going from the 1000s to the DDG 51s, given all 

the due diligence that has gone into getting us to the point of the 

recommendation of the shipbuilding on the 1000s, especially given 

the fact that the President’s budget seems to be going one way. As 

I understand it, the Sec Def has not signed off on Navy’s plan. The 

House Defense Appropriations Subcommittee has recommended 

$450 million for the DDG 1000 and nothing for the 51s. 

In your testimony, you stated that the decision to suspend the 

Zumwalt in favor of more Arleigh Burke class destroyers resulted 

from the Navy’s belief that the DDG 51’s capabilities better met 

the Navy’s needs. Considering the Navy is certainly requesting a 

change in the President’s budget six months after its submission in 

the middle of an appropriations cycle, you know, I certainly am curious about how this decision was made by the Navy. 

You stated in your testimony that there was significant change 

in threat assessments that prompted the review. You know, I 

would like to follow up with you, perhaps in a classified session or 
21 

in response to my questions in writing, in addition to what you 

have stated verbally already on what the change in the threat is. 

Additionally, as you know, and have stated in the past, the DDG 

1000 was developed as a result of an extensive review on budget, 

design, and capabilities. Did the decisions to suspend DDG 1000 

and replace it with DDG 51 undergo a Joint Capabilities Integration and Development System (JCIDS) Review? And can you please 

provide for the subcommittee a copy of that study for the record? 

[The information referred to can be found in the Appendix beginning on page 131.] 

Admiral MCCULLOUGH. As far as the JCIDS process, my initial 

liaison with the Joint Staff has said there is no—they don’t have 

a requirement for us to update the capabilities development document that was approved by the Joint Requirements Oversight 

Council (JROC). I do understand that the Vice Chairman of the 

Joint Chiefs of Staff is going to ask that the Navy come and brief 

the JROC on why we had the shift from DDG 1000 to the DDG 

51s. 

Mr. LANGEVIN. So, Admiral, this decision was made absent a 

thorough review, analysis, and study? 

Admiral MCCULLOUGH. We have done the analysis and study internal to the Navy. And we do it with our analysis shop N81. I also 

will tell you, when the CNO came into office last September, he has 

come with vast experience in the Pacific, both as a deputy Pacific 

commander for approximately a year, the Pacific fleet commander 

for two years, and the Atlantic fleet commander for some period of 

time, six or eight months. And when he started to go through our 

program build for fiscal year 2010, based on his experience and 

where we saw the threat set going based on our analysis, long 

about the beginning of March he said to me that we really need 

to go look at this; I think we have an asymmetric capability mismatch between the projected and future threats and what we are 

building. Our internal analysis says we have excess capacity in 

Naval surface fires that the DDG 1000 was predominantly designed for and that we have the capacity to support the Marine 

Corps surface fires requirements. And so given his experience and 

what our analysis said, starting in about March, we started to 

work this process. We wanted—— 

Mr. LANGEVIN. Admiral, if I could, my time is limited, so if I 

could ask, it is my understanding that the CNO has not in fact 

signed off on Navy’s recommendation transitioning, going back 

from the 1000s to the 51s. Is that correct? 

Admiral MCCULLOUGH. It is in our budget submittal. Deputy 

Secretary of Defense and the Under Secretary for Acquisition, 

Technology, and Logistics, Secretary Young, said the Navy could 

provide this as part of their POM–10 submittal, and that we should 

start to brief Congress and industry. And the CNO and the Secretary have made calls Members, and Ms. Stiller and I have made 

calls on staffers, because we wanted to get to the Congress before 

you all found out about it in the newspaper. So the POM–10 submittal is under review by the Office of Secretary of Defense, sir. 

Mr. LANGEVIN. Thank you. On the design changes and such, in 

your testimony, if we do the 51s versus 1000s, you estimate that 

the DDG 51 line could be restarted you said in fiscal year 2009 
22 

even though you also know that certain industrial base issues need 

to be worked out. You said, given the long lead time for materials, 

such as the main reduction gear, you said—I was going to ask if 

you thought that 2009 was a feasible estimate. You still believe 

that that is correct? 

Ms. STILLER. Yes, sir. 

Mr. LANGEVIN. Okay. Well, you have stated that the new—— 

Mr. TAYLOR. Mr. Langevin. 

Mr. LANGEVIN. Yes. 

Mr. TAYLOR. We are going to let you go a little bit over, but in 

fairness to the other members, you are past your five minutes. 

Mr. LANGEVIN. Thank you for your indulgence, Mr. Chairman. I 

will be brief with just this last question. 

You stated that the new DDG 51s could incorporate additional 

technologies, but we haven’t heard a clear explanation as to what 

those would be. Do your cost estimates for the future DDG 51s reflect current design and capability or do they incorporate additional 

technologies, each of which could lead to insertion or new design 

costs? 

And finally, do your lifecycle comparisons between DDG 51 and 

the 1000s incorporate the increased personnel required for the 51s? 

And have you developed estimates of termination costs for DDG 

1000? 

Admiral MCCULLOUGH. Sir, the capability set I described for 

DDG 51 that would restart as DDG 113 is based on the modernization program that we currently have funded in the DDG modernization program. And that includes the COTS-based computer 

hardware, the open architected computer program, the multi-mission signal processor with inherent ballistic missile defense capability and the extended-range anti-air warfare capability with SM– 

6. That combat system, because of the way it has been developed, 

costs less than the current combat system that is in DDG 112. That 

will be available to drop into DDG 113 if it is a 2009 restart. So 

I am confident in the cost numbers that we have provided in letters 

to what the restart costs for a DDG 51 is. Lifecycle costs, because 

the DDG 1000s are projected to come on service or in service inside 

this POM–10 developed fiscal year 2010 future year defense plan, 

we used the N4 as models on how we project costs for ops and 

maintenance and manpower on DDG 51s and the DDG 1000s. And 

when we look at manpower and fuel costs and spare parts, a DDG 

51 over the lifecycle is about $4 million more expensive to operate 

than the DDG 1000. I will get you the exact number, but I think 

it is $4 million. That is different than what is in the Selected Acquisition Report because the SAR reflects different requirements 

for lifecycle costs than we do when we do budget development for 

ops and maintenance and manpower on ships. 

Mr. LANGEVIN. I know my time has long since expired, so I want 

to thank the chairman for his indulgence. 

Admiral and Ms. Stiller, I will have follow-up questions that I 

would like a quick response for the record. 

Thank you. 

Admiral MCCULLOUGH. Yes, sir, thank you. 

Mr. TAYLOR. The Chair thanks the gentleman. 

The Chair recognizes the gentleman from Indiana. 
23 

Mr. ELLSWORTH. Thank you, Mr. Chairman. 

Thank you, Admiral and Ms. Stiller, for being here. I will try to 

keep mine brief. Admiral, is this, in your vast experience, the first 

time this has ever occurred, we canceled a program midstream, in 

your years in the Navy? In the Navy or any of the other armed 

services? 

Admiral MCCULLOUGH. First, sir, I would like to just make one 

correction. We are not canceling the program. We are truncating 

the program at two ships. And those will be developed and fielded 

both to demonstrate the technology and to use in operations. Allison and I just talked for a minute, I have been in the Pentagon 

for about 3 years, and I have been commissioned for a little over 

33 years. And the only other major program I can remember that 

has been canceled was the A–12. 

Ms. STILLER. From a truncation perspective, and not necessarily 

the Department, but the Sea Wolf (Sea Wolf class fast attack submarine) program was truncated, first, at one submarine and then 

two and finally three. 

Mr. ELLSWORTH. And Ms. Stiller, I know you are the expert in 

percentage of the work being done, we have talked before, the two 

ships that we have contracted, and I have not had a chance to review the documentation, at what level, what percentage are they 

in construction? Are they done? Are they at zero? 

Ms. STILLER. No. 

Sir. We awarded the contracts for the dual lead ships in February of this year. And the plan, Bath Iron Works has the lead 

ship. We had always said we wanted to get to a certain point in 

design before we started construction. That is about 80 to 85 percent. And they intend to start fabrication on the lead ship up north 

in October of this year and about a year later down south. So we 

have not started production, although both yards have taken the 

design products and translated them into usable modules that will 

go into the ship to prove that the digits-to-steel translation works. 

And I am happy to report it has worked incredibly well. The program is going quite well, cost and schedule. DDG 51 is likewise a 

very successful program. 

Mr. ELLSWORTH. So we will produce two only of the DDG 1000s. 

Is that—— 

Admiral MCCULLOUGH. That is the Navy’s plan as submitted to 

OSD, yes, sir. 

Mr. ELLSWORTH. And when that occurs and when these ships are 

fully operational, then, Admiral, would you tell me the difficulties 

or challenges down the road with having 2 of one and 33 of another, whatever the number is, of the 51s? How does that challenge 

you in the training, replacement parts, running two ships only? 

What are the challenges you will face in that? 

Admiral MCCULLOUGH. Well, any time you have a small class, 

you have economy-of-scale issues. So you get a lot of DDG 51s, you 

have one set of issues. When you have a small class, you face another set of issues. That said, I will tell you the Navy has a history 

of small ship classes, and we know how to deal with it. The John 

F. Kennedy was a one of a class. The Enterprise is one of a class. 

There were two California class cruisers. The there were four Virginia class cruisers. There are three Sea Wolf submarines. 
24 

Which ones did I leave out? Oh, Bainbridge is one of a class. 

Truxtun is one of a class. Long Beach is one of a class. So there 

are challenges, but we have the experience to deal with it, sir. 

Mr. ELLSWORTH. Thank you, Mr. Chairman. I will yield back. 

Mr. TAYLOR. The Chair thanks the gentleman. 

And for the record, Mr. Larsen has asked for a breakdown of the 

lifecycle costs of the two vessels to be submitted for the record. 

[The information referred to can be found in the Appendix beginning on page 131.] 

Mr. TAYLOR. The Chair now recognizes Admiral Sestak from 

Pennsylvania. 

Mr. SESTAK. Thanks, Mr. Chairman. 

About three years ago, CNO Clark came before this committee 

and said that, if we do not preserve the DDG 1000, we would be 

putting at risk the sons and daughters of our Nation. For some reason that seemed, understandably, potentially to handcuff the Congress. We took him at his word, or they did. 

Why is your credibility any better today to tell us it is not needed 

and that something else can replace whatever it was that put our 

sons and daughters at such risk? 

Admiral MCCULLOUGH. Congressman, I respect Admiral Clark 

immensely. And when he testified before this committee, given 

what we knew of the world situation at that time, I think he was 

absolutely correct. 

Mr. SESTAK. What did you get to replace whatever DDG 1000 

was supposed to do to protect the sons and daughters? Not that the 

threat has changed. What has taken its place to do that? Because 

the analyses we had over there said the other ones couldn’t do it, 

that led him to state that. What is taking its place to do that? 

Admiral MCCULLOUGH. The surface fires analysis, first, I have to 

brief you in another environment. But I would tell you that the capacity that the DDG 1000 brought in the surface fires for which the 

ship was designed is easily accounted for by the improvements in 

airborne-delivered precision strike munitions, tactical Tomahawks 

today as well as our current—— 

Mr. SESTAK. If I could, Admiral, those analyses were also—and 

there has been no changes in those programs of record since he 

made that statement. 

Admiral MCCULLOUGH. Congressman, to adequately—— 

Mr. SESTAK. With all due respect, there has not been. 

Admiral MCCULLOUGH. Yes, sir. But to adequately get at your 

question, I have got to take it into a classified environment. I can’t 

discuss it here. 

Mr. SESTAK. But if I could, I understand that something has 

moved to the left. I am not arguing that point. I am arguing what 

is taking the place of DDG 1000, that it was the only thing that 

could meet this need? It was the only thing that could meet this 

need. Not the new threat. 

Admiral MCCULLOUGH. Yes, sir. 

No, that is the surface fires requirement. 

Mr. SESTAK. My understanding is that was not just what he was 

talking about, because there is also—my second question is, to 

some extent, the Navy had tried to evolve over the past years not 

to be a Navy of a man but to be a Navy of analysis. Where is the 
25 

area of analysis (AOA) for this proposal of yours? Where is the 

AOA for the CG(X), the DDX—excuse me, I am sorry—DDG 1000 

was supposed to take us to? What about the electric drive that was 

to lead to the electric magnetic gun? And the global war of terror, 

which Secretary Gates came out today and said that is the future 

for the next decades. And DDX wasn’t just meant for Korea, it was 

meant to go—DDG 21—to go around with the electromagnetic 

radar gun (ERG) everywhere, to reach into those countries with 

that, not just Korea, but the concept for the Navy was to contribute 

to the global war on terror. Are we making a strategic decision 

today on one ship? Where is the analysis, the strategic thought, the 

studies and the cost studies that will show, is this really the way 

to go, or is there a different change or a better approach? I don’t 

think we have seen those. 

Admiral MCCULLOUGH. We have significant analysis on the surface fires requirement, not only for the campaign but elsewhere, 

that says—— 

Mr. SESTAK. But this was also—I understand surface fires. But 

we have also taken this ship down from 1,200 rounds to 600 

rounds, from 120 VLS tubes down to 80 VLS tubes. We decremented over these past years that surface fire support. But it was 

the other things, the stealthiness of it, the range, the ability to go 

with the ERG and the electromagnetic gun and what it boded for 

the future. What has replaced those? 

Admiral MCCULLOUGH. I will tell you we will continue to develop 

the integrated electric power system for use in future surface combatants. I would also tell you the closest thing we have with electric or electronic warfare, electromagnetic warfare is the electromagnetic rail gun that is being demonstrated in Dahlgren. And I 

don’t see any potential to weaponize that before about 2020. And 

I would say that the technologies incumbent in the DDG 1000 for 

the fire suppression systems, et cetera, are very applicable to any 

future surface combatant and backfittable—if that is a word—we 

can backfit them into current surface combatants when they are 

modernized. 

Mr. SESTAK. Could I ask another question on cost, because I 

don’t have much time? If you go through the various costs that you 

have had in things like BMD upgrade costs in your President’s 

budget, or the radar upgrade costs on the Zumwalt presentation in 

NAVSEA in February of 2008, and I can give you the rest of the 

documents; when you work out the figures, those costs that the 

Navy has provided, it appears that if you wanted to have a baseline DDG 51 restart, that the cost, according to your figures, would 

be about $3.1 billion, with an SPY–1D with BMD capability versus 

dual-band radar (DBR) with BMD of—for the Zumwalt of about 

$2.6 billion. Then if you bring it to the 15-plus decibels (db), the 

cost is about $4.8 billion for the DDG 51 restart and about $3 billion to get to plus-15 for the Zumwalt. My question is not that 

these figures are right or wrong. Why are your figures today correct, but these figures from your documents aren’t in the past? 

What has changed in the costing of these radars and these combat 

systems? Because, again, I think it goes to the credibility of coming 

forward today and saying, which you did, Admiral, it is going to be 
26 

unaffordable with the Zumwalt; yet just back in February, we were 

saying it was affordable. 

Ms. STILLER. I guess I would say that this decision is based on 

the requirement and a threat, not an affordability decision. But 

back to your numbers—— 

Mr. SESTAK. Are we making this decision not based upon affordability today? Is that what you are saying? 

Admiral MCCULLOUGH. Absolutely. 

Mr. SESTAK. So then why not go with the Zumwalt, since you 

don’t care about affordability? You told us earlier in the testimony 

that you cared about affordability, that it would be unaffordable 

was your exact words, which was part of the reasons you weren’t 

going to go with Zumwalt. 

Admiral MCCULLOUGH. I said it would be unaffordable to upgrade the Zumwalts to the capability we need. Congressman, I 

don’t have the numbers in front of me that you do. 

Mr. SESTAK. Admiral—— 

Mr. TAYLOR. Admiral, we have been generous to everyone on the 

time. But we need to be fair to some other folks. 

Mr. SESTAK. I guess my only comment, after having watched 

AOAs and studies and capabilities and credibility is, wow, we are 

turning on a dime. For a nice niche, I understand that capabilities 

move to the left. But what is filling the rest of the gap? And where 

are the studies attendant to that strategic approach and the credibility of the numbers to support it? 

Mr. TAYLOR. The gentleman’s time has expired. 

If I may, Admiral, the Navy may say that affordability is not a 

question. In fairness, in this room, it is obviously very much a 

question. I don’t recall before the full committee anyone saying, 

let’s take some money from missile defense and put it into ships. 

I don’t recall anyone saying, let’s take money out of aerial tankers 

and put it into ships. 

We have got, approximately, throughout the National Guard they 

are at 60 percent of their equipment. And I don’t recall anyone saying, let’s take it out of the National Guard and put it into ships. 

And again, we are wrestling with about a $13 billion shipbuilding 

account that has been frozen for about 5 years. And even though 

the Defense budget has grown by $100 billion on President Bush’s 

watch, the money for shipbuilding has remained frozen, and the 

fleet has actually shrunk. So, obviously, we live with some constraints the Admiral does not. And again, in fairness, I just think 

that, until we hear the other subcommittees and the other subcommittee chairmen coming forward and saying, here, have some 

money, we have got to do the best we can with what we have. 

Having said that, I would like to recognize Ms. Gillibrand. 

Mrs. GILLIBRAND. Thank you, Mr. Chairman. 

I want to continue some of the lines that my colleague, Mr. Sestak, started. Did you do a comparison of cost studies between how 

much it would be to retrofit or to improve the 51s with the technology that you had specifically developed for the 1000s? 

Ms. STILLER. Over time, over the years we have been asked the 

question about the 10 engineering development models that were 

developed for—that are developed for DDG 1000, and could they 

apply on DDG 51? 
27 

Mrs. GILLIBRAND. Right. 

Ms. STILLER. Of the 10, there were 3 that we have looked at very 

hard. One was dual-band radar. It will not fit on DDG 51. We understand that. We looked at installing the gun, the advanced gun 

system. And that is achievable from a Naval architecture perspective. The magazine would be significantly smaller than what you 

have on DDG 1000. 

Mrs. GILLIBRAND. And did you run the cost for the cost of the 

gun on that? 

Ms. STILLER. We did cost that, but I don’t have those figures. I 

can get those to you. And we also looked at putting the integrated 

power system on DDG 51. You can do that. There would be some 

speed penalties. So that would have to be a requirements decision 

on whether we would backfit that in the modernization program. 

But we have looked at that in the past. And those were the three 

technologies that we thought had the most promise to go on DDG 

51. 

Mrs. GILLIBRAND. So 3 out of 10 can be transferred. And haven’t 

you spent $10 billion on developing the 10 technologies? 

Ms. STILLER. We spent—our total program to date, from 1995 to 

today, and we have about $13 billion invested. Some of it is research and development (R&D), as you mentioned, and some of it 

is the shipbuilding and conversion (SCN) to buy the lead ships. 

Mrs. GILLIBRAND. So if those additional seven technologies were 

developed because of certain requirements that we had, how are 

you going to meet those requirements if you can’t utilize those 

seven technologies? 

Admiral MCCULLOUGH. Ma’am, as I said in my testimony, there 

are some things associated with the reduced manning initiatives in 

DDG 1000 that we will continue to look at for application both in 

back fit and forward fit. I spoke specifically of the fire suppression 

systems, which automatically reconfigure fire mains and put fire 

mains out and allow you to reduce manning, as well as the flight 

deck fire-fighting system. Ms. Stiller spoke of the advanced gun 

system. 

As I look through the list of technologies that I have that we 

have spent money on for DDG 1000, the peripheral vertical launch 

system and advanced VLS has applicability potentially for back fit, 

but for definitely forward fit into CG(X). As I look at integrated 

composite deck house and apertures that we tested in the desert, 

that definitely has applicability to CG(X). The infrared suppression, 

we could fit if we decided we needed that. The integrated power 

system is available for future fit and back fit, as Ms. Stiller just 

said. I spoke to the fire-fighting systems. We think development of 

the total ship computing environment is important. It needs to be 

completed to make the DDG 1000s operational. And we will look 

at that computing program as compared to other computing programs and decide which way is the best way to evolve Navy combat 

systems. The hull form scale model, we want to take the ship to 

sea and see how the different hull form operates in a real environment. The only one that I cannot see at this time is the total undersea warfare system. Now there is a mine avoidance piece of that 

that we would definitely look at. 
28 

Mrs. GILLIBRAND. Okay. So what you are saying is that, of the 

seven technologies that you can’t use with the DDG 51s, you are 

hoping to use them in the next generation of shipbuilding—— 

Admiral MCCULLOUGH. Absolutely. 

Mrs. GILLIBRAND [continuing]. With the CG(X)s. So you are going 

to skip a generation, but you are going to spend all the taxpayer 

money building 51s that don’t have these capabilities that clearly 

we had requirements for or you wouldn’t have devised them. 

So it seems to me we are wasting money investing in the DDG 

51s if they don’t have the technology capabilities that we need, and 

we are going to in fact use those technologies, but we are going to 

have skip a whole shipbuilding generation to do it. 

Admiral MCCULLOUGH. There is a lot of technology that was put 

in the ship because of Naval architecture constraints and some 

things we were trying to do to reduce manning. The reduced manning initiatives we will push as fast as we can. But what we are 

saying to the Congress today is this is a capability mismatch with 

the way we see the threat going. 

Mrs. GILLIBRAND. So you are saying we don’t need those seven 

technologies. 

Admiral MCCULLOUGH. No, ma’am, I didn’t say that. We need 

the technologies to take forward. There are some we can use as 

backfit into DDG 51. The capabilities to combat capabilities we see 

today based on the current and projected future threat is more 

suited by DDG 51. We need the technologies to take surface combatants forward. 

Mrs. GILLIBRAND. Okay. So your testimony at the end of the day 

is that the DDG 51s meet the current needs, threat requirements, 

than the 1000, than the DDG 1000. 

Mr. TAYLOR. Ms. Gillibrand’s time has expired. 

Admiral, if you would please answer the question. 

Admiral MCCULLOUGH. Yes, ma’am, that is correct. 

Mrs. GILLIBRAND. Thank you. 

Admiral MCCULLOUGH. Yes, ma’am. 

Mr. TAYLOR. The Chair recognizes the gentleman from New Jersey. He will be followed by the gentleman from Massachusetts and 

then the gentleman from Virginia, and then we will wrap this 

panel up and move on to the next panel. 

Mr. SAXTON. Admiral, I have spent a fair amount of my time 

here on the committee dealing with the Special Operations Command. And one of the strengths of the Special Operations Command is that they are able to identify threats in real time as they 

change and adapt their operating procedures to deal with those 

threats. A good example, non-Special Operations Command, of 

changing threat occurred beginning in 2001–2002 when we had to 

deal with the improvised explosive device (IED) problem. We are 

still doing that. In order to deal with that problem, we immediately 

or almost immediately established an IED task force to adapt special procedures and make recommendations to this committee as to 

how we could protect the lives and the health of men and women 

who were subject to IEDs. So we understand that threat changes. 

And you have said that multiple times here today. 

In the notes that we have from the Navy, there is a paragraph 

here that says: We must consider the evolving security environ-
29 

ment in which we operate. Given the changes in potential threats 

and the developing capabilities of potential adversaries, we are 

making this move in order to avoid a threat-to-capability mismatch. 

Could you just specifically, as specifically as you can, say how the 

threat has changed and how you believe the decision that you 

made will best meet that threat? 

Admiral MCCULLOUGH. There are three specific areas. One is 

with the increased proliferation of ballistic missiles that provide 

anti-access challenges to our forces today globally, not only the 

high end threat posed by potential adversaries in the Pacific but 

lesser included capabilities in the Arabian Gulf region, in Northeast Asia, and the ability—or the proliferation of that threat globally. So the ballistic missile threat is the first piece. 

The second piece is when you see a high-tech threat capability 

that is usually resident in a nation-state come off the beach in a 

conflict against a non-state actor and strike a warship and do significant damage to it. It is, where is that capability going to go 

next, with what potential non-state actor? And that happened in 

the eastern Mediterranean in 2006. And I will tell you there are 

nations that are developing quiet diesel submarine technology and 

putting it into blue water to challenge where we operate. And we 

need improved capability against the open-ocean deep-water quietdiesel submarine threat. And that is where we see the capability 

that has come rapidly left from where it was projected. I don’t 

think anybody ever envisioned Hezbollah being able to launch a C– 

802, and they did that quite well. 

Mr. SAXTON. Well, thank you, Admiral. 

And before my time expires, let me just congratulate the Navy 

on getting the Freedom underway here in the last week or so. That 

is a good accomplishment. 

Admiral MCCULLOUGH. Thank you, sir. We were very pleased 

with how the builders trials are going on that ship. And it was nice 

to see pictures of her underway, making way with no land in sight. 

But thank you. 

Mr. TAYLOR. The Chair recognizes, again going back to our initial 

motion to allow people who are not members of this committee to 

speak, the Chair recognizes the gentleman from Massachusetts, 

Mr. Kennedy—gentleman from Rhode Island, my apologies. 

Mr. KENNEDY. Thank you very much. 

I appreciate the opportunity to say a few words. Thank the 

Chair. 

What I am interested in is obviously getting to the analyses for 

the costs, because obviously we have seen the Congressional Budget Office (CBO) and Government Accountability Office (GAO) come 

up with very differing costs. And as the chairman said, we have to 

consider the costs as much as you say that this is about mission. 

So we really need to get those costs, as much as you said you don’t 

have the detailed analysis in front of you, I mean, it is really crucial for us before we make these decisions. 

Admiral MCCULLOUGH. Sure. 

Mr. KENNEDY. And frankly, when you are looking at retrofitting, 

you know, DDG 51; when you are looking at reduction loss; and 

timing is money; and how much you are factoring in your ability 
30 

to retrofit that without any loss in time; being able to get those 

supply schedules up; do all of that and keep to a cost schedule 

when you have already got, you know, DDG 1000 in the pipeline 

with the schedules in line and with costs coming down, given the 

fact that all your, you know, cost redundancies have all been embedded in the first ship, and we are starting to see that come down. 

I mean, obviously, trying to compare last ship in the last class with 

the first ship in the new class is comparing apples and oranges. 

And you know, we know that the first Zumwalt is a very expensive 

ship, but it is obviously embedded with redundant costs that aren’t 

going to be seen in a future ship. And we are buying, you know, 

a whole generation of new, you know, technologies for all the future 

oncoming generation of cruisers and the CV(N). As you pointed out, 

these new technologies are going to be applicable in other platforms. So I think we have to get all of this in proper perspective. 

And it would be really helpful to us if you did that. 

I think the concern is, you know, we have got open architecture 

with the Zumwalt, and yet we don’t with the old Aegis system. And 

you know, how do you begin to retrofit an open system with a 

closed system? And obviously, that is not something you can really 

do. And so this begs some questions in terms of industrial base, 

you know, that I am concerned with. And then, in terms of the— 

from what I understand in terms of the BMD threats, you know, 

I am not certain that the case has been clearly made to me that 

retrofitting DDG 51s is necessarily less cost compared to upgrading 

the 1000s. I mean, you know, like I said, you are still having to 

re-up the—you know, doing it one way versus the other still needs 

to be presented to me. We still haven’t been given the proper analyses. And I think we deserve to get these analyses really put in 

front of us and the historic data and all of this because, you know, 

we are all being given information from various sources, and I don’t 

think we are getting it all clearly put to us. 

So I would really just ask those from this panel and the next 

panel to be giving us the straight information so that we can all 

work off the same sheet of music here. That is the only way we can 

go about making our decisions without making them in the vacuum. And that is the reason why I am here, is because, you know, 

obviously, we want to make these decisions. We are talking about 

costly decisions if we don’t make the right ones. And you know, capabilities are very important. And we really want to make sure we 

have the right capabilities. And putting, you know, new weapons 

systems on old ships, we want to make sure that—from what I 

have been told, that doesn’t make a lot of sense because it doesn’t 

work. You know, trying to retrofit modern technology with old systems doesn’t really necessarily work. And we are looking at new 

threats. Well, how do we incorporate the new technology to meet 

those threats? So I know a lot has been discussed today, and I am 

here to listen and learn, but I am anxious to also get all the information that you said that you are going to provide this committee 

as well. 

Admiral MCCULLOUGH. Yes, sir, we will be glad to provide that 

level of detail on cost and also the technological path. And I would 

say that your reference to open architecture in the Aegis system, 

the older Aegis systems, are closed. It is all proprietary Lockheed 
31 

Martin. With the Congress’s help, the Navy has spent a lot of 

money to get the system to be open architected so we can publish 

it in our library, and all the interface standards are known by all 

the corporations that allow free market competition for upgrades to 

both the hardware and the software piece of the program. But we 

will be happy to provide you that detail, sir. 

Mr. KENNEDY. And you know, that obviously is going to save the 

government money in the years ahead. But time most of all because you can, you know, be able to move in and out new systems 

as the open architecture will allow. And obviously, we are anxious 

to reduce the time delays and move the best and the brightest folks 

to be able to take advantage of the latest in technology and give 

it to our people in the field ASAP when it becomes available. So 

it is a big benefit of what our last moves have been in terms of this, 

you know, DDG 1000. And that is the aspect of it that we don’t 

want to lose if we are talking about different hulls. 

Mr. TAYLOR. Mr. Kennedy, if you can, wrap it up, please. 

Mr. KENNEDY. Okay. If you can’t retrofit the old hull with the 

new technology, what happens to the new technology is what I am 

asking you. 

Admiral MCCULLOUGH. Yes, sir. We will provide you that information. And then, one thing, when I said this is a capabilitiesbased decision on the part of the Navy, I don’t mean to ever imply 

that we don’t look at the cost based on affordability. Because we 

are very gracious of the money that the Congress provides to operate and maintain the Navy. So when I said it was a capabilitiesbased decision, that is what drove us, but we are very conscious of 

how much things cost. And I will be glad to get you the information 

on the costs and details as well as the technology flow. 

[The information referred to was not available at the time of 

printing.] 

Mr. TAYLOR. The Chair thanks the gentleman. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Just one more question for Admiral McCullough. Again, getting 

a little more general, broad in scope, there has obviously been some 

challenges in the costs, rising costs of our shipbuilding programs. 

I was wondering, has the Navy or the National Shipbuilding Research Program (NSRP) explored different software applications, 

such as the COTS software or other technologies, that might enable 

these efforts to be a little more cost-effective both in the design, engineering, and manufacturing of the vessel? And another part of 

that question, is I know the Sec Nav and CNO often cite best practices and lessons learned from foreign shipyards. And can you tell 

us a little bit about how those best practices might succeed here 

in the United States? And are we able to apply those similar practices or technologies here? 

Ms. STILLER. Yes, sir, the National Shipbuilding Research Program that you talked about has been in place for quite a while 

now. And it has evolved over the last couple of years where we 

wanted more stakeholder involvement in the process. So the program executive officers that buy the carriers and the submarines 

and the surface ships for the United States Navy have an active 
32 

role with industry to define what projects ought to be explored, 

where they see there would be benefit on programs that are coming 

up or in process. So I would say that is a very well run program 

and has really afforded us a lot of opportunities. As for where can 

we learn from the foreign yards and how they have become efficient, each of our shipbuilders has gone and benchmarked other 

yards. And we have also had an OSD study that benchmarked our 

yards versus the European and Asian shipyards and has found, 

from 2000 to 2005, there has been improvement in our U.S. yards 

in certain areas. So I think you can see the improvements as each 

of the yards has brought them in and put them into their processes. So, yes, sir, we have certainly seen leveraging their experience into our shipbuilding programs. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Mr. TAYLOR. Thank you. 

And I, hopefully in fairness to all concerned, have waited until 

last. And I very much appreciate all of the questions. 

We have been very generous in the time. We probably are going 

to stick closer to the five-minute rule in the next round. 

But a couple of observations. In the lead-up to the budget vote 

of May the 9th, 2001, President Bush would repeatedly go on television and say that some economists worried about us paying down 

the debt too soon. I would like to find that economist. He said that 

we could spend more, collect less, and somehow balance the budget. 

We are $4 trillion deeper in debt than when we took that vote. 

Since that time, in fairness, Congress has passed a huge prescription drug benefit bill, very expensive. We have been involved 

in two very costly wars, both in human lives and in dollars. We 

have had at least seven hurricanes hit our country. Midwest floods, 

tornadoes, and a lot of very expensive things happened. 

What this committee has to do is struggle with the reality that 

neither of the Presidential candidates is proposing a substantial increase in the shipbuilding budget, and that every ship that is proposed is a great ship. The question is, where is the money for these 

ships going to come from? 

Ms. Stiller, not that long ago, one of your colleagues, and a man 

I consider to be a great national resource, Mr. Young, made a statement before the Senate Armed Services Committee that he felt like 

if we were to continue the DD 1000 program that at some point the 

price would come down to about $2.6 billion per ship. We sent the 

Department and Mr. Young a letter about a month ago saying that 

if he could find any contractor anywhere in America who would 

commit to that firm price for follow-on vessels of the DD 1000, that 

the committee would drop its objections to the third vessel. 

Now, we have had a month, and we have had a heck of a lot of 

time for the two potential vendors to take a look at it, come back 

to us with a firm, fixed $2.6 billion price. Have either of the contractors stepped forward with that contract? 

Ms. STILLER. Sir, I am not aware if they have. 

Mr. TAYLOR. Admiral, you strike me as a very smart man, so I 

am going to ask you a fairly simple question. At the moment, what 

does the Navy project the cost of a DD 1000 to be when they are 

delivered, the first two? 

Admiral MCCULLOUGH. About $3.2 billion, sir. 
33 

Mr. TAYLOR. What did the Navy project the cost of the LCS to 

be? 

Admiral MCCULLOUGH. Basic construction costs were projected to 

be $220 million when we started the program. 

Mr. TAYLOR. And the cost of that fairly simple warship is now 

expected to be? 

Admiral MCCULLOUGH. About two and a half times that, sir. 

Mr. TAYLOR. About two and a half times, for a fairly simple, 

what was intended to be a fairly simple low-cost alternative to 

ships. Given that, what degree of confidence do you have that that 

the DD 1000 will be delivered at $3.5 billion? 

Ms. STILLER. Sir, I have a tremendous amount of more confidence than what we saw in LCS. As you well know, the Naval 

Vessel Rules were in development when we were in design on LCS. 

That is not the case on DDG 1000. Naval Vessel Rules were approved and in place. As you know, we started construction on LCS 

vessels before the design was barely started. And as I said earlier, 

in the case of DDG 1000, we will be 80 to 85 percent complete with 

the design before we go into construction. I am not going to tell you 

there won’t be challenges on lead ships. There always are. But I 

don’t see us set up in the same way that we were on LCS on this 

program. 

Mr. TAYLOR. So you are telling me you have a fairly high degree 

of confidence it is going to be delivered at $3.5 billion? 

Ms. STILLER. Sir, the contract—yes, sir. It is $3.2 billion, but yes, 

sir, at this point in time, I see no reason to say we won’t be able 

to deliver. The companies, we awarded the contracts, they feel like 

they can deliver for that amount of money. So I am fairly—I am 

very confident at this point. But the dynamic is, what is the future 

surface combatants, and what is behind it? And that is important 

to the yards as well. 

Mr. TAYLOR. The goal, the minimal size articulated by the Navy 

for the surface fleet is what? 

Admiral MCCULLOUGH. It is 88 surface combatants plus the 55 

LCSs, I believe, is what was in the 2009 shipbuilding plan. 

Mr. TAYLOR. But the total number, and I think it was first articulated by Admiral Clark when he was CNO and repeated by Admiral Mullen and repeated again by Admiral Roughead, your goal 

is how many total ships? 

Admiral MCCULLOUGH. Admiral Roughead refers to it as a force 

structure floor of 313 ships. Admiral Mullen referred to it as a 313- 

ship force structure plan. So 313 is the minimum number of ships, 

with a maximum acceptable risk that we believe we need. 

Mr. TAYLOR. And just to walk the people of this Nation through 

this, the fleet today is approximately 290? 

Admiral MCCULLOUGH. 280 ships, sir. 

Mr. TAYLOR. 280 ships. So to get to 313 would require approximately how many ships to be built each year, and how long for 

each of those ships to remain in the service? 

Admiral MCCULLOUGH. Design service lives (DSLs) vary, and the 

program is laid out to recap based on the service lives of the ships. 

For example, combatants are about 35 years. Aircraft carriers are 

50 years. And so we program recapped it to maintain the force 
34 

level at the right capability mix. I would tell you it is about 12, 12 

and a half ships a year. 

Mr. TAYLOR. Okay. Given that the shipbuilding account has been 

frozen at roughly $13 billion a year by the President’s request, and 

Congress has tweaked that a little bit each year and made it a little bit bigger, but it is still not much more than $13 billion, given 

the cost of this ship at $3.2 billion per copy, best case scenario, how 

many ships does that let you build a year? 

Admiral MCCULLOUGH. I believe it was 7 in the fiscal year 2009 

program, and we are looking at 10 in the fiscal year 2010 program 

that is under debate, or under submittal to the Office of the Secretary of Defense. 

Mr. TAYLOR. But this year’s budget request was for seven? 

Admiral MCCULLOUGH. Yes. 

Mr. TAYLOR. Based on the reality of these numbers. 

Admiral MCCULLOUGH. Yes, sir. 

Mr. TAYLOR. The committee tweaked that up to I believe 10 by 

moving—by canceling the third—I am sorry, by pausing the third 

DD 1000, put in an LPD and additional T–AKEs into the mix. The 

committee was able to take the President’s request and get it up 

to 10, but still dealing with the harsh realities of a $13 billion 

building account. Is that correct? 

Admiral MCCULLOUGH. I have seen the marks, sir, I will defer 

to you on the marks. 

Mr. TAYLOR. The point, I would remind the committee, is that 

this committee, I think very wisely, is spending $18 billion on mine 

resistant ambush protected vehicles (MRAPs) so that the kids who 

are on patrols in Iraq and over the next years are going to be less 

likely to die from improvised explosive devices. We have a huge bill 

coming on aerial tankers. That alone is going to be between $35 

billion and $40 billion to build the first 179. The National Guard 

is at about 60 percent of its equipment, and we do not operate in 

a vacuum. All of these things have to happen. 

Again, I personally want to commend Admiral Roughead. He was 

good enough to sometime last fall throw this proposal at me. It 

took me some time to think it through, and it obviously would 

make a change at both the Mississippi shipyard and the Bath shipyard. But given the harsh economic realities, I think he made the 

right decision, and I think he should be commended for that decision. 

Admiral, I want to thank you for appearing, and, Ms. Stiller, I 

want to thank you for being here. 

Mr. Kennedy has a follow-up. 

Mr. KENNEDY. When you give your analysis, can you give us 

ships at sea days, because when we talk about ships at sea that 

are available, we are interested in the days that they can be at sea. 

New technology in Zumwalt gives us a lot more days at sea, from 

what I understand, because of its commercial off-the-shelf and the 

embedded technology makes it so it doesn’t, like the old Arleigh 

Burkes, have to come in and spend a lot of time being re-upped and 

reworked, and spend less lifetime in the shipyard, so to speak. So 

it is more useful to the Navy more often. 
35 

What we are talking about is total number of days that it can 

actually be used by the Navy. So we want real apples-to-apples 

comparison. 

Admiral MCCULLOUGH. Yes, sir. We can give you the current surface combatants and the projected operational availability of DDG 

1000. We can provide that. 

[The information referred to can be found in the Appendix beginning on page 132.] 

Mr. TAYLOR. Last, I want to remind this committee that it was 

the will of this committee and the full House and the full Senate 

that the next generation of surface combatant will be nuclear-powered. Mr. Bartlett began pushing that idea when he was the chairman of this committee, and fuel at that time was about $70 a barrel. And last time I checked, it was over $130 a barrel, making Mr. 

Bartlett’s judgment at that time look even smarter now. 

Again, I commend the CNO because I think the extension of the 

51 program gets us to a nuclear cruiser quicker than the building 

of the 1000. So for a lot of reasons, Admiral, I hope you would pass 

on my compliments to Admiral Roughead. I think he made a tough 

but right decision for the future of the Navy. Thank you for appearing. 

Mr. TAYLOR. The Chair now calls our second panel. 

Our second panel consists of witnesses well known to this committee: Mr. Ronald O’Rourke, a Senior Analyst of Naval Affairs 

with the Congressional Research Service; Dr. Eric Labs, who conducts independent ship cost analysis with the Congressional Budget Office (CBO); and Mr. Paul Francis, the head of the Maritime 

Analysis Branch of the Government Accountability Office. 

We thank all three of you gentlemen for being here. By prior 

agreement of the committee, you will be recognized for seven minutes apiece. Who wishes to go first? 

Mr. O’Rourke, if you don’t mind. 

STATEMENT OF RONALD O’ROURKE, SPECIALIST IN NAVAL 

AFFAIRS, CONGRESSIONAL RESEARCH SERVICE 

Mr. O’ROURKE. Chairman Taylor, Ranking Member Bartlett, distinguished members of the subcommittee, thank you for the opportunity to testify on this issue. With your permission, I would like 

to submit my statement for the record and summarize it briefly. 

Mr. TAYLOR. Without objection, so ordered. 

Mr. O’ROURKE. I would like to make five basic points. First, the 

recent change in what the Navy wants to do with destroyer procurement appears rooted not just in a concern about shipbuilding 

affordability, as the Navy witnesses have stated, it also reflects a 

shift in thinking concerning relative mission priorities. The Navy 

now wants its destroyer procurement over the next several years 

to be oriented toward improving the fleet’s capabilities for, among 

other things, air and missile defense. 

This shift in mission priorities for new destroyers might be rooted partly in a several-year slip in the schedule for procuring the 

lead CG(X). The Navy had wanted to begin improving the fleet’s air 

and missile defense capabilities through a procurement of CG(X)s 

starting in fiscal year 2011, but the date for procuring the lead 

CG(X) now appears to have slipped several years. 
36 

The shift in the Navy’s relative mission priorities for new destroyers also reflects a Navy reassessment of the capabilities that 

will be needed in coming years to conduct certain operations. 

The DDG 1000 is a multi-mission destroyer with an emphasis on 

land attack and operating in littoral waters. This mission emphasis 

traces back to the program’s origins in the early 1990’s, and predates certain more recent developments such as, for example, the 

concern that has developed in recent years over Chinese modernization, an effort that appears aimed in part at improving Chinese capabilities for operating in blue waters, and includes, among 

other things, the acquisition of more modern submarines, antiship 

cruise missiles and theater ballistic missiles, including, as DOD 

has now noted, antiship ballistic missiles. 

The DDG 51 is a multi-nmission destroyer with an emphasis on 

blue-water operations, including air defense and a recently added 

capability for missile defense. So my first basic point is that this 

change in the Navy’s mission priorities for new destroyers is a key 

factor in understanding and evaluating the Navy’s change in its 

preferred path for destroyer procurement. 

My second point is that although the discussion of restarting 

DDG 51 procurement has focused on building repeat copies of the 

current flight to a design, there is also the option of procuring a 

modified version of the DDG 51 that would have reduced operating 

and support (O&S) costs. My statement discusses three potential 

ways for reducing the O&S costs of the DDG 51, and shows some 

estimates of the O&S savings that might result from such steps. 

The key point here is that the DDG 51’s O&S cost is not written 

in stone. It can be reduced. 

The DDG 51 design can also be modified to improve its air and 

missile defense capabilities, and my statement outlines some options for doing this, by equipping the ship with an improved radar 

or additional missile launch tubes, or both. 

My third point is that although the discussion has focused on 

building new DDG 51s, this situation raises the question of whether the current program for modernizing the existing DDG 51s 

should be altered so that the modernized ships would have reduced 

O&S costs and perhaps also improved air and missile defense capabilities. 

Expanding the scope of work to be done in the DDG 51 modernization program could have implications for the industrial base 

part of this situation, which I will get to in a moment. 

My fourth point is that an additional option for improving the 

fleet’s air and missile defense capabilities through ship procurement over the next few years would be to procure a few or several 

noncombat ships equipped with a powerful radar for supporting the 

fleet’s missile defense operations and perhaps also air defense operations. The aim in procuring these adjunct ships would be to provide the fleet in the nearer term with some powerful missile defense radars at relatively low cost, pending the entry into service 

later on of significant numbers of CG(X)s. These noncombat radar 

ships could be similar to the Cobra Judy replacement ship. 

My fifth and final point concerns the shipbuilding industrial 

base. Policymakers have expressed concern about the potential impact on the shipyards of a decision to stop DDG 1000 procurement 
37 

and restart DDG 51 procurement. Particular concern has been expressed about Bath Iron Works since construction of surface combatants is Bath’s primary source of work. As I discussed in my 

statement, a notional calculation suggests that building 9 or 10 

DDG 51s might provide roughly the same number of shipyard labor 

hours as building the final DDG 1000s, and that assigning 5 or 6 

of those DDG 51s to a shipyard might provide that shipyard with 

roughly the same number of labor hours as it would have received 

if it were the primary yard for building 3 of the final 5 DDG 1000s. 

But there is more to the issue than that. In discussing the issue 

regarding Bath and Ingalls, a key point is that building DDG 1000s 

or DDG 51s are not the only options for supporting these yards. To 

the contrary, there are several additional options that might be 

used as supplements to help maintain employment levels and preserve key shipbuilding skills. 

My statement lists a number of these options, and it is not an 

exhaustive list. One of those options would be to assign the modernization of existing DDG 51s to the two yards that originally 

built the ships, meaning Bath and Ingalls. I maintain a report on 

the age of ship modernization program, and as I discuss in that report, some industry sources have advocated shifting the DDG 51 

modernizations to Bath and Ingalls. And if the scope of work in the 

DDG 51 modernization program were increased to include steps 

like those I mentioned earlier for further reducing the ship’s O&S 

costs or for improving their air and missile defense capabilities, 

then that could increase the amount of supplementary work that 

would be provided to Bath and Ingalls by assigning the modernization to those two yards. 

As I just mentioned, that is only one option for putting additional 

work into Bath or Ingalls. There are several others. The key point 

is that building DDG 1000s or building DDG 51s are not the only 

way to support the yards. 

Mr. Chairman, this concludes my statement. Thank you again for 

an opportunity to provide my statement. I will be happy to answer 

any questions the subcommittee has. 

Mr. TAYLOR. Thank you, Mr. O’Rourke. 

[The prepared statement of Mr. O’Rourke can be found in the Appendix on page 75.] 

Mr. TAYLOR. Dr. Labs. 

STATEMENT OF DR. ERIC J. LABS, SENIOR ANALYST, 

CONGRESSIONAL BUDGET OFFICE 

Dr. LABS. Mr. Chairman, Congressman Bartlett, and members of 

the subcommittee, I appreciate the opportunity to appear before 

you today. I would like to make several points, but I, too, would 

like to summarize my statement for the record and submit the formal one. 

First, the total cost of the Navy’s shipbuilding program through 

the period covered by the DOD Fiscal Year Development Plan 

(FYDP) would be about 30 percent higher than the Navy currently 

estimates. 

Building the newest generation of destroyers and cruisers probably would cost significantly more than the Navy estimates. 
38 

My third point, building two DDG 51 Arleigh Burke class destroyers per year between 2010 and 2013 would cost less than 

building five more DDG 1000s. Counting projected operating costs 

over 35 years, the total ownership cost of five DDG 1000s would 

almost equal of that of eight DDG 51s. 

According to the budgetary information provided in the DOD’s 

2009 FYDP, the Navy estimates that the cost of all its shipbuilding 

activities would average about $16 billion a year in 2009 dollars 

over the period covered by 2009 to 2013. That amount is 25 percent 

greater than the $13 billion that Navy spent on average for shipbuilding between 2003 and 2008. 

CBO’s estimates of the costs of those same activities would be 

about $21 billion through 2013, or 30 percent more than the cost 

projected in the Navy’s plan, and about 60 percent more than the 

amount the Navy has spent recently. 

To the DDG 51 destroyer, the Navy had planned to buy one DDG 

1000 destroyer each year between 2009 and 2013. In addition to 

the two authorized in 2007, the service’s 2009 budget suggests that 

the Navy expected the two ships to cost $3.2 billion each, with the 

average cost of the five follow-ons $2.3 billion each. CBO, by contrast, estimates the first two to be about $5 billion each, with the 

average cost of the follow-ons to be $3.6 billion each. And we used 

the DDG 51 program as an analogy for estimating those costs. 

The Navy has asserted that the basis for CBO’s estimate may 

not be valid because the DDG 51 had a number of problems in the 

early stages of its construction that should not be expected to occur 

during the construction of the first DDG 1000s. Specifically, the design of the lead DDG 51 was disrupted and delayed because a new 

design tool being used at the time was incomplete and not well understood. It had to be abandoned and the design restarted using 

more traditional methods. The design of the lead DDG 51 was thus 

about 20 percent complete when construction began. 

By contrast, according to the Navy, the design of the DDG 1000 

progressed far more smoothly. The Navy expects to have the design 

80 to 85 percent complete when construction begins this summer. 

In addition, because the DDG 51 is a smaller, more compact ship, 

the Navy believes that on a ton-per-ton basis it has been more difficult to build than the DDG 1000 class is expected to be. 

Although the Navy may not encounter the same problems constructing the lead DDG 1000 it did when constructing the lead 

DDG 51, CBO expects that the service will encounter other problems that will increase the cost. Problems with the first littoral battle combat ships and with the lead LPD–17 illustrate the difficulties the Navy has had. Both the LCS and LPD–17 are much less 

complex technology than the DDG 1000. And, in addition, while the 

designs of littoral combat ships and the DDG 51 were only 20 to 

30 percent complete at the start of fabrication, the design of the 

LPD–17 was about 80 percent complete at the start of fabrication, 

and it was arguably the Navy’s most troubled program over the 

last 20 years. 

A comparison of the Navy’s estimate for two additional DDG 51s 

and an assessment for the seven DDG 1000s which were slated to 

be purchased in 2013 illustrates the risk for cost growth. This information was provided to the Senate. The Navy stated that if the 
39 

Congress authorized the purchase of two new DDG 51s in 2009, the 

cost would be about $3.3 billion, or slightly less than $1.7 billion 

each. 

The Navy has also stated that to build the cost of the seventh 

DDG 1000 in 2013 would be about $2.4 billion in 2013 dollars. If 

you adjust those dollars down to the same-year dollars, 2009 dollars, the Navy’s estimates imply that the 5,000 extra tons that the 

DDG 1000 is larger than the DDG 51 will increase that ship’s cost 

by only $200 million, or 10 percent, compared to a DDG 51. 

If CBO’s estimates prove correct, the lead ships of the DDG 1000 

program would actually experience lower cost growth than many of 

the Navy’s lead ship programs of the past 20 years. The Cost Analysis Improvement Group (CAIG) has done an analysis that has 

shown that 5 of 8 lead ship programs experienced cost growths of 

over 50 percent. And the CAIG’s analysis did not include the Virginia class program, which experienced cost growth of 11 and 25 

percent for the first two ships. Nor did it include the LCS, which 

has experienced cost growth well over 100 percent. 

Looking at the cost of restarting the DDG 51 program, the subcommittee specifically asked CBO to examine those costs of canceling the program and restarting DDG 51 production. The Congress authorized funding for what would be the last DDG 51s in 

2005. Out of a total program of 62 DDG 51s, 9 remain under construction. 

CBO does not have sufficient information available to determine 

how much it would cost to restart the production above extrapolating the cost of the ships themselves. CBO assumed it would cost 

$400 million to reestablish the lines, and thus buying eight DDG 

51s, two per year between 2010 and 2013, would cost a total of 

$15.7 billion. Building five DDG 1000s between 2009 and 2013 

would cost $18.5 billion. Twelve DDG 51s, or three per year between 2010 and 2013, would cost about $21.4 billion. 

With respect to total ownership costs of the DDG 1000 and DDG 

51 destroyers, the Navy has stated that total operating cost of a 

DDG 51 would be about $41 million per year, or about 10 percent 

more than the DDG 1000 $37 million annual operating cost. That 

difference is much smaller than the Navy previously estimated. In 

2005, the Navy asserted that operating a DDG 51 would cost about 

30 percent more than operating a DDG 1000. In comparison, CBO 

at that time testified before this subcommittee and said that the 

cost difference would actually be about 6 percent more for a DDG 

51 versus a DDG 1000. 

CBO expects that the total ownership cost of a DDG 51 would 

be about 60 percent the cost of a DDG 1000. Over the course of a 

35-year service life, the cost to buy and operate a DDG 51 would 

be $2.4 billion. In comparison, the total cost to build and operate 

a DDG 1000 destroyer would be $3.9 billion. Thus, the cost to buy 

and operate five DDG 1000s would total $19.4 billion over 35 years. 

In comparison, the cost to buy and operate more DDG 51 destroyers over a period of 35 years would be about $19.2 billion for 8 

ships and $26.8 billion for 12. 

Thank you, Mr. Chairman. That concludes my statement. I am 

happy to answer any questions you may have. 
40 

[The prepared statement of Mr. Labs can be found in the Appendix on page 93.] 

Mr. TAYLOR. Dr. Labs, for the record, what was the cost of a barrel of fuel when the CBO ran these calculations? 

Dr. LABS. You are talking about the total ownership costs. I 

didn’t compare the cost of fuel, Mr. Chairman. I used the statement 

of operating costs that the Navy used in its letter to the Senate. 

So whatever the cost of fuel was when they projected those costs. 

Mr. TAYLOR. For the record, I would like that comparison, because it is my understanding that the DDG 51 uses less fuel. With 

the significant growth of the cost of fuel, and without a lot of confidence that that price is going down, I think it is a fair question 

to ask and something that we need to look at. 

[The information referred to can be found in the Appendix beginning on page 132.] 

Mr. KENNEDY. Mr. Chairman, I didn’t understand what he was 

saying in terms the operating in a lifetime costs, you know, it is 

half the number of people on the DDG 1000 as the DDG 51. What 

was the relative cost of manning the DDG 1000? 

Dr. LABS. DDG 1000 is 148 crewmembers, and the DDG 51 is 

about 320 or 312. 

Mr. KENNEDY. So over 35 years, what is the difference in operation? 

Mr. TAYLOR. Mr. Kennedy, you will be recognized in regular 

order. 

Mr. KENNEDY. He just testified, and it was very unclear what he 

was saying. 

Mr. O’ROURKE. On the question of fuel costs, I actually put that 

question to the Navy. They provided that answer to me a few days 

ago, and they said that the steaming cost figures that show in Admiral Roughead’s May 7 letter to the Senate reflected an analysis 

done in February and reflected a fuel cost of about $112 per barrel. 

Mr. TAYLOR. Thank you. 

The Chair now recognizes Mr. Francis. 

STATEMENT OF PAUL L. FRANCIS, DIRECTOR, ACQUISITION 

AND SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. FRANCIS. I appreciate being invited here today to participate 

in the discussion of surface combatants. I ask that my written 

statement be submitted for the record. 

Much of what I am going to talk about today comes from a report 

that we issued today on the DDG 1000. At GAO, we have not analyzed the comparison between continued construction of the DDG 

51 and the DDG 1000; however, much of what I am going to say 

today is going to address the likelihood, and rather, I would say, 

the unlikelihood that the Navy would have been able to execute the 

DDG 1000 program within its current budget in terms of time and 

money. 

Let me start off by saying that I think the Navy has done some 

really good things to manage the DDG 1000 program. I think their 

approach to technology development has been sound. I think their 

software-development program has had a very good approach. And 
41 

I believe their design process which they modeled after the Virginia class submarine has been much better than prior classes. 

But even with these best efforts as the Navy stands to begin construction of the first DDG 1000, the cost and the design and the 

construction schedule are under strain, and let me give you some 

detail on that. 

In the recent schedule for the program, they have extended the 

delivery of the ship by about one year, which I think is a good 

thing, but within that schedule, some key events have been pushed 

out two to three years. The net effect has been a lot of the margin 

in the construction schedule to adjust for likely problems has already been taken out. 

For example, light off of the ship is a key event, and that is when 

you turn on all of your key ship systems, hull, mechanical and electrical, and all of your mission systems, combat systems like your 

radars and gun systems and sonar. 

Originally on the DDG 1000, they were all going to be lit off in 

2011. Now that has been split in two. Now the ship will be lit off 

in 2011, but the combat systems will be lit off in 2013, two years 

later. The significance of that is it is just before sea trials begin, 

so the margin between turning on the combat systems and beginning sea trials has been compressed. 

The integrated power system that provides the electricity and the 

propulsion for the ship, originally the plan was to test that on land 

in 2008, install it on the ship in 2009, and then have that ready 

two years in advance of lighting the ship off. The current plan now 

is to install on the ship in 2009, but not complete the testing until 

2011. So the test of the integrated power system will follow installation by two years so that problems discovered will be have to be 

retrofitted onto the ship. And again, when they have those test results, it will be just when they are ready to light off. 

Dual-band radar. The original plan on that was to have both a 

multifunction radar and the volume search radar tested and installed on the deckhouse before the deckhouse was shipped from 

Gulfport to either one of the yards. Now the current plan is only 

to put the multifunction radar in the deckhouse first. The volume 

search radar has slipped from 2010 to 2013. They won’t put the 

volume search radar on the ship until it is already afloat. And 

again, that will be just before light off. 

Finally, software has also slipped three years. So originally we 

were going to have the software in 2010. Now it will be 2013. 

Again, the significance of that is the software, the volume search 

radar and the light off are all going to occur in 2013, so there really 

is no margin for error in the schedule. 

I look at these as practical, sensible decisions the program office 

has to make because the combat systems have been delayed. They 

are not going to be there. But I think the question for oversight is 

just before we have begun construction, it seems like we have executed all of the workarounds that you would normally execute during construction. So the question is where does that leave us when 

we do run into problems in construction, and I think they will result in needing more time and money. 

In the area of money, the ship construction budget is $6.3 billion 

for both ships. I think that is unlikely to be enough to pay for the 
42 

ships. Right now our historical analysis of lead ships is that they 

overrun by about 27 percent. Most of that cost growth occurs in the 

second half of construction. Even the Pentagon’s independent cost 

estimates say those two ships are going to cost almost $900 million 

more than the Navy estimates. 

Being a little more specific, the Navy has about $363 million left 

in unobligated money. That is money that is not under contract; 

yet a couple of big things are not under contract yet, including the 

volume search radar and some of the combat systems. The cost estimates for those are ranging between $340 million and $852 million, so the Navy has just enough money now to cover the low end 

of those systems not under contract, assuming no cost growth. 

That is part of the reason why we question whether it was prudent to go forward with contracting for the third ship in January 

2009. Our sense was there would not be enough construction experience to validate the cost estimates and get a good track record 

on the first two ships before getting a good contract for the third 

ship, and, of course, setting the prices for the remaining four. Besides that, the Navy was not going to be able to begin construction 

of the third ship until July 2010 under the best of circumstances, 

so that ship could be deferred, in our view, without a major impact 

on the industrial base. 

Let me just wrap up by making a few comments on the Navy’s 

proposed decision to truncate the program. In my view, it seems 

like it is a painful decision, one that is borne out of maybe fiscal 

and changing requirements necessity. But the decision is a poor reflection, I think, on the requirements, acquisition, and budgeting 

processes that developed the business cases for these ships. 

I don’t think it is a case of poor execution that the program office 

couldn’t execute the program well, but rather a business case that 

wasn’t executable. And it is not isolated. It is the last in a series 

of business cases that we couldn’t execute for the time and money 

set aside. So I think we really have to ask ourselves why is this? 

Why do ship systems get approved and presented for budget that 

can’t be executed for the amounts that are estimated? And I think 

one of the reasons is too many demands are made on the ship programs. 

I think that what ends up happening is we get unrealistic compromises to try to meet everyone’s demands. I will say on the DDG 

1000, sort of a microexample where the scope of the ship was set 

around mission requirements. Then the desire to reduce manning 

increased the complexity of the ship further. But the budget for the 

ship—the cost estimate was constrained by the budget, and the 

schedule was constrained by the shipyard’s workloads. So you 

ended up with something that you couldn’t execute. 

So just in closing, I was very much struck by Admiral 

McCullough’s comment that current fire support capabilities were 

sufficient to meet the need, yet three years ago that didn’t appear 

to be the case, and that was the basis for the ship. So we have to 

ask those questions. What is it about these processes that aren’t 

giving us the right answers at the right time? 

Thank you, Mr. Chairman. 

Mr. TAYLOR. Thank you. 
43 

[The prepared statement of Mr. Francis can be found in the Appendix on page 107.] 

Mr. TAYLOR. And I am going to open this up to the panel. In the 

summer of 2006, then-Chairman Bartlett took us to visit several of 

the shipyards, including the Marinette shipyard. In the summer of 

2006, we were told at Marinette everything is on track, everything 

is on budget, and sometime between that visit, which I am going 

to guess was in August, and about November we started getting 

frantic phone calls from the CNO that we have a world of troubles. 

We are way over budget, we are way behind schedule. It was several things. 

So my question is given what has happened with what was supposed to be a fairly simple, low-cost warship, is there a professional 

guidepost based on a percentage of the completion of the hull 

where people can look at a ship and say, okay, we are past, let us 

say, the 80 percent mark, we are still on budget, and we have reason to believe that everything is tracking the way it should? 

The reason I ask that is at what point do we pass that mark on 

the DDG 1000 so that we have some degree of certainty that the 

$3.2 billion number that Ms. Stiller just gave us will be accurate 

and that we are more or less out of the woods? 

And so if that is a fair analogy, that is what I am looking for, 

because based on the LCS, I have a very low degree of confidence 

that that $3.2 billion target will be met. I open that question up 

to the panel. 

Mr. FRANCIS. Mr. Chairman, let me start off. We have found it 

very difficult, quite honestly, to find those right way points because 

it seems like every program has a different set of points and uses 

a different set of terminology to describe the design process. But 

nonetheless, on something like the LCS, I would say the percentage 

of the design, the detailed design, that was demonstrably done as 

one of those way points, and on that one you would say not a lot 

of technical content, so you wouldn’t have to worry so much about 

technology development. So I would take that design process and 

then couple it with what the yard’s experience has been in its construction time lines, and you would have to match those then to 

the cost estimate. I think you can see that up front. 

So those are three things that I would list out for something like 

LCS. 

DDG 1000 adds the dimension of technology uncertainty. So even 

though, let us say, your marker for detail design looks really good, 

if your radar and your propulsion system and other things haven’t 

been developed and proven yet, those drawings aren’t any good. So 

what looks good at this point might get undone by discoveries with 

technology. 

If they had demonstrated those technologies as they planned, at 

this point the confidence level would be very high, assuming that 

they funded at a high confidence level in the cost estimate. And at 

one point on the ship, they planned to demonstrate the power system and the radar on a surrogate ship that would have given us 

that confidence. So DDG 1000 is going to be several years, especially until that radar is demonstrated, that we will have that confidence. 

Mr. TAYLOR. Anyone else? 
44 

Mr. O’ROURKE. Just to add on a slightly different aspect of this, 

I think another issue to be aware of is whether any of the costs 

normally associated with building the DDG 1000 will be deferred 

beyond the normal accounting period for totaling up the ship’s total 

procurement cost. We saw a little bit of that happen with the lead 

LPD–17, and as I was able to understand it, something like a little 

more than $100 million of what normally would have been included 

in the end cost of that ship was deferred beyond the accounting period and was covered elsewhere in the Navy’s budget, which gave 

us a distorted understanding, if you will, of what the total cost was 

to build that ship. And I think that could be an issue to look at 

in connection with the DDG 1000 construction process, to make 

sure that elements that are normally costed within the total end 

cost of the ship are, in fact, being included there, or whether there 

are any elements that are being deferred into other accounts and 

other stages of the accounting process. 

Mr. TAYLOR. Thank you. 

Mr. Labs. 

Dr. LABS. Mr. Chairman, I would add two things to that. I don’t 

have a scientifically based number. I agree with Mr. Francis, it 

does vary from program to program. I sort of follow a rule of 

thumb, which is based on instinct and a hunch than anything else, 

which is that you want to at least see half, you know, 60 percent 

or so of the ship before you are getting a sense whether things are 

on cost and on target at that time. You know, your confidence is 

certainly growing by that point. 

Another point I would make relevant to the LCS program is one 

of the big issues there, in my opinion, was that I don’t believe the 

Navy ever came in with a realistic approach to the cost of that ship 

to start with. Any historical analogy to save the frigate program, 

the FFG–7, would have told you that a ship of that size would cost 

somewhere in the $400 million to $500 million range. If they had 

started with that premise and worked from there, I honestly don’t 

believe the LCS would have been in as much trouble as it has been 

over the last couple of years. 

Mr. TAYLOR. Gentlemen, we have six people, five-minute rule. 

We are supposed to have a hard stop at 1 p.m. I hope the committee will let us go five minutes over. So we are going to strictly 

adhere to the five-minute rule starting with Mr. Bartlett. 

Mr. BARTLETT. Thank you. 

One of you mentioned that the Navy now says that they have 

adequate fire support. I know that through the years there has 

been a considerable difference of opinion between the Marine 

Corps, whom they are supporting, and the Navy as to what adequate fire support is. Are they now in agreement? 

Mr. FRANCIS. That is what I understand from the Navy. We did 

a report for this committee, this subcommittee on that issue two 

years ago, and they had finally reached agreement, and the agreement was there was a gap that needed to be filled, and it needed 

to be filled by the DDG 1000. So to hear today that the agreement 

is that, in essence, gap is not there and doesn’t need to be filled 

by the DDG 1000 would represent, in my view, a new agreement. 

Mr. BARTLETT. Thank you. 
45 

When we first envisioned the DD(X) program, how many ships 

were envisioned? 

Mr. O’ROURKE. In the early stages when it was still DDG 21, a 

number as high as 32 was mentioned. And that then became 16 to 

24, and that got moved down to 12, and then it became 8 and then 

became 7. 

Mr. BARTLETT. As I watched this occur, I was impressed that 

what we ended up with was—even at seven ships, it was not a 

class of ships, it was little more than a technology demonstration 

platform, and I thought that two was a little different number than 

seven, if, in fact, it was simply a technology demonstrate platform. 

I signed onto this program when I was assured that the hull was 

going to be used in CG(X). I feel a little had now when I am told 

the hull will probably not be used in CG(X), because my original 

disposition was that if all it was was a technology demonstration 

program, maybe we could demonstrate those technologies on other 

platforms and save the cost of this class and begin earlier or enlarge the second class. 

Mr. O’Rourke, I was interested in your little charts that showed 

the comparison between the cost of the DDG 1000 and the DDG 

51. Of course, where the DDG 51 fell far short was in manning. 

How much of a modernization that we might use could really reduce manpower costs to near that of the DDG 1000? 

Mr. O’ROURKE. I put that question to the Navy because Admiral 

Roughead’s May 7 letter to the Senate referred to the fact that his 

chart did not include any manpower reductions that would be realized through the DDG 51 modernization program. And the Navy 

came back to me when I asked them about that, and the understanding that I have based on the Navy’s explanation back to me 

is that the DDG 51 modernization program is not officially expected to achieve any further manpower reductions, but that the 

size of the DDG 51 crew for other reasons has recently been reduced by about 18 people from the figures shown in Admiral 

Roughead’s letter. 

So the size of the DDG 51 crew, as explained to me by the Navy, 

is coming down by about 18, but not because of the DDG 51 modernization program. And my own statement talks about the possibility of taking the crew size down further on the basis of an industry briefing that was given to me five years ago, and also this subcommittee’s own statement along those lines and a committee report that came out in 2004. 

Mr. BARTLETT. As the price of oil goes up, the Chinese are increasing their efforts at scouring the world to buy oil, and not just 

oil, but buy goodwill. Coincident with that they are aggressively 

building a blue-water navy. None of this, of course, was accurately 

predicted in 1995 when we began the design of the DDG 1000 line. 

In view of the fact of what China is doing, and we now have the 

LCS, which was not even a dream in 1995, is this not a good decision to go to the DDG 51, which has more of a blue-water focus, 

than staying with the DDG 1000, which had a considerable littoral 

focus? 

Mr. O’ROURKE. As a CRS analyst, I can’t say whether a decision 

that someone advocates is good or bad, but what I can tell you is 

that there have been certain developments in the Navy’s under-
46 

standing and the general understanding of what the future operating environment might be that have occurred since the early 

1990’s, which was the period when the DDG 21 program was originally conceived. And one of those major developments was the 

growing concern over Chinese naval modernization, which is something that I track in some detail in another one of my CRS reports. 

Concerns over Chinese naval modernization did not begin to 

mount in general discussion until the mid- to, I would say, in the 

late 1990’s, and the discussion has really only gotten going on that, 

I would say, in the last five years or so. So this, to me, is a much 

more recent development compared to the date and time when the 

DDG 21 program was conceived. 

Mr. TAYLOR. The Chair now recognizes Admiral Sestak from 

Pennsylvania. 

Mr. SESTAK. If I can make a statement, I actually find today a 

bit disappointing to some degree to what you spoke about, Mr. 

Francis. 

From what I can gather over the past months, there has been a 

decision that the Intelligence Community has said something has 

moved to the left, that we now need a ballistic missile defense ship 

at sea to face a more nearer-term threat than we had had from the 

Intelligence Community for quite a few years. 

I have never met a one-armed intelligence officer because they 

are always saying on the one hand, but on the other hand. However, we are making a dramatic sea change right now, a strategic 

sea change for a ship based upon some intelligence, is what I gather from today’s testimony. 

Undergirding that is a concern about numbers of ships to where 

I had thought, particularly under CNO Clark’s tenure when he 

proffered that maybe 260 to 300 ships in his 30-year shipbuilding 

plan was a way to begin to come to grips as a Navy that potentially 

posturing differently, let us say more ships of BMD stationed in 

Guam, for whatever reason that that might be an area of the world 

where you would want that capability rather than having to rotate 

them, taking five to keep one forward, could begin to give us a 

Navy that isn’t always turning it appears that we need more 

money. In fact, the 30-year shipbuilding plan this year says we 

need 40 percent more to do our 30-year shipbuilding plan for 313 

ships than just last year, and then the cost that comes with that. 

So my issue today is more of credibility not of individuals, but 

of a process of how can Congress truly have credibility on two 

areas. One obviously, I think, is the cost. Do we really know what 

this DDG Flight II will be? In your testimony it is a standard stickshift Flight II, but my limited knowledge of what that radar is 

going to have to do if this threat has truly moved to the left is that 

radar will need a lot of upgrade to handle this threat. Where is 

that cost? 

Second, I don’t know where the strategic sense of the Navy is 

today. We were going to the littorals. Just like Secretary Gates in 

the front page of the Post said today for our military, it is the global war. Now we have gone back to the blue seas, and I gather there 

is a spectrum here. 

I was taken by the analysis over the years in the Navy that 

drove us to a certain position. I am unimpressed by the failure to 
47 

provide that same kind of analysis that Congress, I think, should 

be making its decision on, not how many ships, but what is the capability we need. And so I guess mine is more a statement of disappointment in credibility of a process, not only how we got here, 

but how do we prevent it in the future, the most capable Navy at 

the least cost. And this is a strategic sea change. And, frankly, 

from my limited time in the Navy, I don’t feel I have the factors 

in front of me to make a decision, nor have I been able to gain 

them. This may be the right decision. 

Just for a question, what do you feel about the credibility of the 

process that got us here? And, Mr. O’Rourke, the credibility of the 

strategic sense of where the Navy is going, the Navy of the future, 

because we are making a dramatic change in integrated air and 

missile defense (IAMD). 

Mr. FRANCIS. Quickly, Mr. Sestak, I do think that we need to ask 

some fundamental questions about requirements, acquisition and 

budgeting. The discussion today, I think, was unique in that we are 

talking about a change in requirements. Part of my analysis is 

even had those requirements changed, we would not have been 

able to execute the programs as planned. So maybe that deals more 

with acquisition and funding. But when you add the requirements 

piece, for ballistic missile defense, that is a portfolio system, so we 

have to ask a hard question that if there is a change in that threat, 

how does that translate into an Aegis capability? And, secondarily, 

what did happen with the fire support requirement for the marines? 

Mr. TAYLOR. The Chair recognizes the gentleman from Virginia 

Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Mr. Francis, you spoke earlier about the development of these 

major systems on board and, because of the delay in the development of those, those systems not being lit up until just about the 

time the ship goes to sea trial. Can you explain some of the extended concerns about that and how that may either affect cost or 

affect delivery times on potentially DDG 1000s, and how that 

maybe plays into the decisionmaking on DDG 51 in the context of 

what the Navy is presented? 

Mr. FRANCIS. Yes, sir. 

Our analysis shows that under the current schedule which has 

just been readjusted as construction begins, that those key events, 

like the integrated power system, the combat systems, particularly 

the radar and the software, are all planned to occur, demonstrate 

late in the program. If there is any delay in those systems, light 

off will get pushed out, which means the sea trials will get pushed 

out, which means IOC, the initial operational capability, will get 

pushed out. 

As the schedule delays, you incur additional costs, the overhead 

of the yards, software engineers and so forth. So the implication of 

that is if anything goes wrong, if any of those things don’t deliver 

as planned, and deliveries have been changed a number of times, 

we will have cost increases, which means then that the money we 

have set aside to buy at this point the seven DDG 1000s won’t be 

enough, and we will most likely end up making adjustments in the 
48 

near-term budget to accommodate those increases, which will push 

other ships out. So I think that is the tie between the two. 

Mr. WITTMAN. One additional question. You had spoken that the 

yards couldn’t start on DDG 1002, which is the third ship requested in the fiscal year 2009 budget, until July of 2010 at the 

earliest. Do you have any sense when either yard could start construction of a DDG 51 considering the time frame they spoke about 

being able to start on DDG 1002? 

Mr. FRANCIS. That I don’t, sir. I know there was a discussion 

about the reduction gear time line perhaps being the pacing item, 

and I thought that was set at 50 weeks. I don’t know if my colleagues have any information on that. 

Mr. O’ROURKE. The amount of additional long lead time for the 

reduction gear is an additional—the time period is the addition on 

top of what the normal lead time would be for the reduction gear. 

The reduction gear is one longer pole in the tent, and the other 

variable in that situation is the extent to which—and I think Allison mentioned this—the extent to which you can look at doing the 

construction of the ship through an altered sequence that would accommodate a later delivery of the reduction gear than would normally take place in the sequence. So 50 weeks on top of the normal 

lead time. 

Mr. WITTMAN. If 400- to $450 million were appropriated and authorized for advantaged procurement of a destroyer in 2009, what 

do you estimate the industrial base impacts might be if that decision were made? 

Mr. O’ROURKE. I think it would depend on what other near-term 

work would be put into the yards to make up for whatever gap 

might be developing between the winding down DDG 1000 work 

before you begin to wind up DDG 51 work. There will be potentially a valley developing depending on the timing of DDG 51 restart, and then it becomes an issue what other work was put into 

the yard to fill out that valley. 

Mr. WITTMAN. Would those dollars smooth out that dip? 

Mr. O’ROURKE. The sooner you commit money to the 51 restart, 

the greater likelihood you have of mitigating the valley between 

the winding down of the DDG 1000 work and the winding up of 

the DDG 51 work. 

Mr. TAYLOR. The Chair recognizes Mr. Courtney for five minutes. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

I would actually like to ask Mr. Labs a couple of questions. Earlier Mr. Taylor was pointing out the track record over the last four 

or five years of a $13 billion flat line for shipbuilding or average 

cost for shipbuilding. In your report on page 2, you estimated— 

well, you reported, rather, that the Navy’s shipbuilding plan 

projects a cost of roughly averaging $16 billion. Your analysis is 

that it is probably closer to $20 billion; is that correct? 

Dr. LABS. That is correct. 

Mr. COURTNEY. If we follow this recent or this new recommendation to switch from the DDG 1000 to the DDG 51s, would that 

change your numbers? 

Dr. LABS. Absolutely it would change the numbers. Would they 

change the numbers significantly? I don’t know. I would have to actually sort of run those numbers, do the analysis. 
49 

Certainly there is a number of changes that the Navy is also proposing to make, not just the cancellation or the truncation of the 

DDG 1000. They are also proposing to push the CG(X) beyond 

2013. That frees up money within the FYDP. I would need to reanalyze to tell you whether the Navy has gotten closer to a $13 billion 

steady state, if that is your desired aim, or something else. 

The basis of the numbers that I have presented in my testimony 

assumes two DDG 51s a year, which we assume cost more than the 

Navy’s estimate for DDG 1000, although I don’t think that they 

cost more than the CBO’s estimate of the DDG 1000. 

On the other hand, the Navy’s profile that Admiral McCullough 

talked about was not two a year; it was one, two, one, two, something like that. So some of those individual unit costs might be 

higher, but the overall annual budget cost would be lower. I would 

have to run those to know what the effect is, and whatever other 

effects the Navy makes in their shipbuilding plan. 

Mr. COURTNEY. Is your analysis based on 2008 dollars? 

Dr. LABS. 2009 dollars. 

Mr. COURTNEY. So if we are looking at the back end of the shipbuilding plan, which is somewhere between 2017 and 2019, and actually I am assuming there will be some inflation between now and 

then, we are talking numbers that are going to be significantly 

higher than even what you report? 

Dr. LABS. Absolutely. The CBO analysis is in constant 2009 dollars. So if you want to see what those numbers look like in thenyear or budget-year dollars, you would have to add inflation on top 

of that. 

Mr. COURTNEY. It is certainly going to give the next Administration a big headache coming in. 

The other question, you heard Admiral McCullough testify that 

this change would move up the schedule to hit the 313 fleet from 

2017 to 2019. I just wonder if you had any comment on that projection, whether or not that makes sense to you? 

Dr. LABS. Doing sort of a mental calculation, that seems plausible. Last year’s schedule on the LCS program had a different 

building profile, and the 313 ship goal was going to be hit in 2016. 

Now with this year’s shipbuilding plan, that got pushed out by 

three years. If you end up putting more destroyers in the plan 

versus what is currently in the budget, it seems plausible you will 

reach that two years earlier. 

Mr. O’ROURKE. I took Admiral McCullough’s comments to be 

based primarily on simply the difference between getting another 

five DDG 1000s and getting eight or something like that DDG 51s. 

And you have an extra 3 or something ships, and if you were getting kind of close to 313 anyway, you might get over that number 

1 or 2 years higher. That is how I understood the comment from 

Admiral McCullough. 

Mr. FRANCIS. I don’t have anything to add on that. 

Mr. COURTNEY. I thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman. 

Just for your information, the Chair will recognize in order Mr. 

Allen, Mr. Langevin, and Mr. Kennedy, and that will conclude the 

hearing. 

Mr. Allen. 
50 

Mr. ALLEN. Thank you, Mr. Chairman. And thank you all for 

being here today. 

I would like to begin with a statement. This clearly was a tough 

decision for the Navy made at the highest levels, but, at least from 

my perspective, it seems to me the right decision. I do believe the 

Navy has defended this decision in terms that can be easily understood. You would have to be in this area not paying attention to 

understand that the threat of quiet submarines is an issue that we 

need to pay attention to as a country, and that the development 

and the proliferation of missile technology is something that every 

branch of the service has to take into account. 

If you marry that to their reevaluation of how often they would 

actually use the land support firepower of a DDG 1000, I believe 

the Navy has made a case. 

But I have real concerns for what the decision means for the industrial base going forward. In some ways going back to an established program means there will be greater stability going forward, 

but I am concerned about the number of ships. 

As I read your testimony, Mr. O’Rourke, it sounds as if you are 

saying that six DDG 51s would essentially replace the work at 

Bath Iron Works of three DDG 1000s. I’m not sure that is the right 

number. I think we need to know more and get some sense of the 

timing. 

I am also concerned if the CG(X) gets pushed out over some period of time, there is another gap developing here. Whether we are 

looking beyond this period or we are adding some more DDG 51s 

into the FYDP, it does seem to me that we are going to need more 

FYDPs to fill this gap, because we have to preserve the six shipyards that we have today. I think they are a vital component of our 

national security. 

Having said all of that, I am interested in your suggestions for 

other work, because no matter where we go, these shipyards need 

some additional work, particularly Bath Iron Works, which is dependent on surface combatants, and so I would like to get some 

sense from you, Mr. O’Rourke, of what can be done to preserve in 

particular that yard because it is so dependent on surface combatants? What other work could we move their way? 

Mr. O’ROURKE. That is one of the larger points that I do try to 

make in my testimony. When we are looking at the situation facing 

Bath, it is not one that is solely of DDG 1000s or DDG 51s, because 

there are a number of other possible forms of work that could be 

put in these yards, and I listed a number of these options in my 

testimony. 

I have already spoken about the idea of assigning the DDG 51 

modernization to the boatyards. 

Another one is to assign the Aegis cruiser modernization to the 

build yards. 

A third would be to procure some number of these noncombat adjunct radar ships that I talked about. 

Another would be to have Bath Iron Works participate somehow 

in the construction of the littoral combat ships that are built to the 

General Dynamics design. 

Another is to procure one or more LPD–17s beyond those that 

are in the Navy’s current shipbuilding plans and perhaps have 
51 

Bath participate in building parts of those ships, similar to how 

Bath in fact is participating in the construction of one of those 

LPDs already. 

Another option is to procure additional LHA-type amphibious— 

big-deck amphibious assault ships. 

And then there were some other options I also mentioned. I developed a list of 10, and I don’t even think that is exhaustive. 

And one other key point is that even if you add something to the 

shipbuilding plan and it only goes to Ingalls, that could still help 

Bath because it could permit more of the DDG–51 work to go to 

Bath, while still adequately supporting Ingalls. So we have to look 

at the total mix of work between both of these yards and then decide what might be the most cost-effective path forward. 

But my main point is that this is not a question of building only 

1000s or only 51s. There are a number of other things out there 

that could put work into these yards to support employment levels 

and to preserve critical shipbuilding skills, including outfitting 

skills and combat system integration skills. 

Mr. ALLEN. Thank you, Mr. Chairman. I will yield back. 

Mr. TAYLOR. Thank you. 

The Chair recognizes Mr. Langevin from Rhode Island. 

Mr. LANGEVIN. Thank you, Mr. Chairman. 

I want to thank the panel for being here; and, Mr. Chairman, 

again I want to thank you again for holding this very important 

hearing on a very complex issue. 

Let me say that I have not been impressed by the process that 

the Navy has gone through in making the decision to cancel the 

DDG–1000 program and going to the 51s, and it seems to me that 

there is a rush to judgment here without thorough analysis. 

To the panel, let me ask you this question. In the Navy’s testimony, they estimated that the DDG–51 line could be restarted in 

fiscal year 2009 even though they are facing several ship and vendor-based issues. My question is, what are your views about the 

feasibility of restarting the 51 line in fiscal year 2009 and what 

would you estimate the costs of resuming production to be? 

Dr. LABS. I do believe that the Navy can certainly restart the line 

in 2009. The question comes as to when would the ship deliver. If 

you have a delay because of the reduction gear or other parts, other 

reasons, you need to get various vendors up and running again, the 

ship may not deliver in four or five years, which is what you typically see with DDG–51s today. It may take six years for that ship 

to deliver. So you can certainly begin building DDG–51s in 2009 if 

you choose. 

If you are trying to ask me what are the exact costs of sort of 

reestablishing those production lines, as I indicated in my testimony, I don’t have a good handle on that, and I am not sure the 

Navy has a perfectly good handle on that yet. We assumed for the 

purposes of this analysis that it would cost around $400 million to 

sort of reestablish that line. The costs could be more or costs could 

be less. Because there is—the shipyards themselves have to restart 

production, but there is also a number of Government Furnished 

Equipment (GFE) components, government-furnished equipment, 

that also must be provided. And I don’t have a complete analysis 
52 

of what all the potential costs and implications of that are at this 

point. 

Mr. LANGEVIN. And other panel members disagree or want to add 

to that? 

Mr. O’ROURKE. I just think it also depends in part on what it is 

we are talking about when we talk about reopening the line. It is 

not really just one object. It is a lot of vendors and a lot of locations. The Navy can certainly take steps to reopen or reestablish 

certain elements of that line along certain timelines. So something 

could be done in fiscal year 2009. Exactly how much and, as Eric 

said, what effect that ultimately has on when that first ship is delivered is a somewhat different question. 

Mr. LANGEVIN. All right. Well, there has been, of course, now in 

terms of actually restarting the line—and you are not exactly going 

to be building the old 51s, because we are talking about insertion 

technologies. So, you know, there has been discussion of incorporating these new technologies and design changes to the DDG– 

51, which could further increase per unit costs over historical 

trends. Have you received any information from the Navy as to 

what additional capabilities the DDG–51 might have and what the 

cost estimates would be for those changes? And if so, could you 

comment on the Navy’s estimates? 

Mr. O’ROURKE. Just very generally, in my own testimony I have 

included discussion of options for altering the configuration of the 

Flight IIA design to include additional features, either an improved 

radar or more missile launch tubes, or both. But my understanding, both prior to this hearing and also listening to the Navy’s 

testimony at this hearing, is that they are proposing not to build 

altered DDG–51s but more or less repeats of the current Flight IIA 

design as it would exist in the DDG–12. 

Mr. LANGEVIN. Let me stop you there, if I could, because it is my 

understanding that the existing design of DDG–51 is not capable 

of supporting the radar that would be needed for ballistic missile 

defense, which is what their—major part of their rationale of moving back to the 51s, because it—— 

Mr. O’ROURKE. Right. And the sense I get from the Navy’s testimony is that they are not envisioning changing the radar on the 

ship. That is an option I discussed in my testimony, but I think 

that the path that the Navy laid out in their testimony is to continue getting the 51s with a SPY–1 radar, not with a radar using 

active array technology. And so, although I discuss that in my testimony, the sense I get from the Navy’s testimony is that they are 

looking at not doing that, not making any major changes to the 

combat system of the ship as it would exist from the DDG–112 

baseline. 

Mr. FRANCIS. Mr. Langevin, there are—I know in the missile defense budget they do put in money to modify the Aegis ships, both 

the cruisers and the destroyers. So there are some modifications associated with being compatible with the ballistic missile defense 

ships (BMDS). Now whether it is physically to the radar itself or 

whether they are software upgrades or what have you, but there 

would be a cost that would have to be accounted for in the new 

ships if in fact they are being deployed for ballistic missile defense. 
53 

Mr. O’ROURKE. Right. But the ships that the Navy is talking 

about building, based on their testimony today, is a configuration 

that is similar to what you get when an existing DDG–51 comes 

out of the modernization program, which is the configuration similar to DDG–112, the last of the 51s currently under construction. 

That is not a ship with a different radar, it is not a ship with additional missile tubes or any other major configuration changes. 

Mr. TAYLOR. The Chair recognizes the gentleman from Rhode Island, Mr. Kennedy. 

Mr. KENNEDY. Thank you. Thank you, Mr. Chairman. 

And, Mr. Chairman, I agree with you, frankly, on the whole 

premise of your hearings, that we haven’t gotten the Navy’s true 

answer on really the real cost of these ships. But the same goes 

true with the flip side of the coin. What makes us think, if we 

haven’t gotten the true cost of the DDG–1000, that we are going 

to get the true cost of the retrofit of the DDG–51? Okay? 

So you are going to say to us, we are going to save a lot of money 

because we are not going to go down the, quote/unquote, cost overruns of the DDG–1000, and then you are going to give us a lot of 

reasons why that is so expensive. But then we are going to avoid 

talking in this hearing about what Mr. Langevin just brought up, 

and that is all of the costs that have not been brought up that will 

be incurred from the vendor base that will have to be restarted. 

Granted we didn’t even appropriate any dollars in this year’s appropriations bill for any DDG–51s. So we are talking 2005 was the 

last time they came off, trying to restart that vendor base. You just 

pointed out that it is closed architecture. So trying to retrofit and 

redesign every subsystem of the DDG–51 so that if you are trying 

to upgrade the radar you have got to do that and if you are trying 

to upgrade this you have got to do that, and who knows what the 

real cost of the reduction gear long lead time is? Do you guys have 

any idea? I mean, I know that you quoted $400 million, but where 

did that number come from? From CBO? Can you guys provide 

that? 

Dr. LABS. I used the $400 million number as an assumption 

based on, actually, this subcommittee’s mark in the authorization 

bill, where you appropriated $400 million either for DDG–1000 advanced appropriation or for surface combatant advanced appropriation. As much as we have tried with either the contractors or with 

the Navy, we haven’t gotten any details on that. 

Mr. KENNEDY. Okay. Well, obviously, the point being is that we 

can’t put our finger on anything that you are giving us if we are 

not getting an apples-to-apples comparison, whether it is talking 

about DDG–51 or 1000. And it is not fair for us to be out there 

whacking the cost of 1000 for costs if you are not comparing it to 

what the refit cost of 51 is. That is one issue, and we are just talking costs there. 

Now the second issue is what Mr. Sestak brought up; and that 

is, what is the national security interests here? And it seems as 

though we have had several CNOs come up to the Congress for 

years and say that we needed this DDG–1000 because the littoral 

environment was where our threat was. And what I am interested 

in is, as Mr. Sestak said—and, by the way, Mr. Sestak was the 

Deputy Chief of Naval Operations for Warfare Requirements and 
54 

Programs when he was in the Navy. So he should have some idea 

of what this stuff is. And he said it baffled him, just up here right 

now, what the big change in rationale was. He was there when the 

intelligence was dictating the littoral environment. He knows— 

when he said, why not move the ships over to Guam, you know 

what he was talking about. He was talking about the Taiwan 

Straits and China. He is talking about the missile defense from 

China. 

The DDG–1000 has the stealth capability. It looks like a fishing 

vessel out there, according to the testimony. Whereas the Arleigh 

Burkes look like big huge destroyers and can be picked off like 

that. 

When are we going to factor in the cost of 360-some odd American lives on these vessels, too? These are all calculations we are 

going to make if they are going to be patrolling the waters. When 

does America not want to be looked at like we are overbearing in 

those straits and instead have a nice, calm, stealthy cruiser out 

there for protection, but we don’t want to have visible annoyance 

by having a big, big destroyer out there? But a nice stealthy destroyer like a DDG–1000 is just what we want in case we need it, 

but not in their face, which is what we want with the Chinese. Not 

in their face but there in case we need it. 

These are major policy decisions on national security basis we 

need to consider. And, frankly, I don’t think we have really gotten 

it; and so that is what I hope we get a better answer from the Navy 

on. 

I thank the chairman for giving us this time today to have these 

hearings. 

Mr. TAYLOR. Sure. 

Mr. O’Rourke. 

Mr. O’ROURKE. Yeah, just very briefly, I agree with you that we 

need to see a comparison of the two paths forward in terms of costs 

that accounts for whatever configuration changes, among other 

things, the Navy might want to make in the 51 design. They need 

to show those numbers. 

And I agree with you also that I think the Navy needs to explain 

more fully the concept that they have introduced here in their testimony today that they have undergone a shift in their thinking 

about missions. And what I gather from Admiral McCullough’s testimony today is that they feel they have done that analysis and 

that they are prepared to share it. I think they now need to share 

it so people can see these things and make their evaluation. 

Mr. KENNEDY. With your indulgence, Mr. Chairman, one point. 

Mr. TAYLOR. Mr. Kennedy, it is not so much my indulgence, but 

the committee is going to need this room at 2 o’clock, full committee. 

Mr. KENNEDY. Okay. 

Mr. TAYLOR. But if I may, let me answer a couple of questions 

that you already asked, and I think you did it—I think you asked 

some great questions. 

Number one, our Nation has already received—delivered over 50 

DDG–51s. So I think it is fair to say that we have a very good 

track record of what they cost and what all the equipment on them 

cost. 
55 

Second thing, I would remind the gentleman that the 1000 is 

physically one-third larger than the 51. So if it is just looking for 

something—and I have got to tell Mr. Kennedy that I am absolutely amazed on my flights overseas to visit the troops how many 

ships you see as you are crossing the ocean. Yes, it is stealthy on 

radar, but in the case of the Taiwan Straits, as you mention, it is 

a fairly small place with a lot of junks, a lot of nonhostile vessel 

traffic and, yes, a lot of airlines up there, any one of which can hit 

their GPS and go, that is your latitude and longitude of the American fleet. So, again, just something we ought to keep in mind. 

I do want to commend all of the witnesses for asking some great 

questions. That was the purpose of this hearing, to clear the air. 

And if any of you three gentlemen would like to answer Mr. Kennedy’s questions, and then we will let you go. 

Mr. FRANCIS. Just two points, Mr. Chairman, Mr. Kennedy. 

I take at face value what the Navy said about the change in the 

blue-water threat and the missile defense. I do think the statement 

that the fire support requirements can be met with existing capabilities, that came as a surprise to me. 

And I think the chairman makes a good point on cost. I think 

we have to be skeptical of cost estimates, but the DDG–51 has a 

lot of actual cost history. And I would come back to the chairman’s 

challenge that he mentioned in the beginning of the hearing, ask 

for a fixed price and see who gives you a fixed price contract, and 

I think you might get one on the 51. It is a good question to ask, 

and I think it is telling that you can’t get one on the DDG–1000. 

Mr. O’ROURKE. Just very quickly, to sum up what I was saying 

earlier, Admiral McCullough said in his testimony today that they 

have done the analysis. So I think it is reasonable for other people 

to ask to see that analysis. 

Dr. LABS. Mr. Chairman, Mr. Kennedy, I would just simply agree 

with Mr. O’Rourke and Mr. Francis. I think you are absolutely 

right. You are entitled to sort of see what the numbers are going 

to start those vendor bases back up again. But we do have an 

awful lot of statistical and historical data on the DDG–51 that 

makes it at least easier for somebody like CBO to sort of give a better sense of what it might be than, say, the DDG–1000, where you 

really have to use different kinds of analogies. 

Mr. TAYLOR. Again, we want to thank all of our witnesses. We 

want to thank all the members who participated. And this hearing 

is adjourned. 

[Whereupon, at 1:15 p.m., the subcommittee was adjourned.] 

A P P E N D I X 

JULY 31, 2008 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

JULY 31, 2008 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

JULY 31, 2008 

(131) 

RESPONSE TO QUESTION SUBMITTED BY MR. LANGEVIN 

Admiral MCCULLOUGH. The Joint Requirements Oversight Council (JROC) was 

not specifically engaged in the Navy’s deliberations prior to submission of the Navy’s 

POM-10 proposed plan to the Office of the Secretary of Defense. The JROC will be 

briefed 18 July 2008. 

The Navy is concerned about evolving capability gaps in the outer air battle in 

the blue water, particularly against the improved ballistic missile capabilities of 

near-peer competitors. The DDG 51 is a proven, multi-mission guided missile destroyer and the Navy’s most capable ship against ballistic missile threats. Ballistic 

Missile Defense is a key capability that DDG 1000 lacks—that capability is already 

being incorporated into the DDG 51 class. 

The way ahead for FY 2010 and beyond will be determined by the Navy and the 

Department of Defense’s continuing assessment of existing and evolving threats, ensuring that the Navy delivers those capabilities best suited to meet our national security needs both now and the foreseeable future. This will include, but not be limited to, defense against missile threats and the challenging requirements to operate 

in the littoral environments. As the Navy and the Department of Defense develops 

its FY 2010-2015 budget, all of these considerations will be weighed to ensure we 

build the right Navy for the future. [See page 21.] 

RESPONSE TO QUESTION SUBMITTED BY MR. TAYLOR ON BEHALF OF 

MR. LARSEN 

Admiral MCCULLOUGH. The comprehensive estimate of total life cycle costs for the 

DDG 51 and DDG 1000 classes is stated in the Selected Acquisition Reports (SAR’s) 

provided to Congress. These life cycle cost estimates employ data from the Navy Visibility and Management of Operating and Support Costs (VAMOSC) database. They 

include both direct costs and other categories of costs that are not budgeted to a 

specific program. The summary of the SAR Life Cycle Cost estimates (FY07$) for 

the two classes are: 

Category DDG 1000 DDG 51 

Mission Pay and Allowance 7.2 22.8 

Unit Level Consumption 11.0 12.6 

Intermediate Maintenance 0.8 0.8 

Depot Maintenance 10.9 7.6 

Contractor Support — 0.9 

Sustaining Support 15.4 3.3 

Indirect 4.8 12.8 

Other — — 

Total Annual 50.1 60.8 

All costs in FY07$ based on December 2007 SAR’s.
132 

The Navy has also provided Congress a comparison of average annual costs directly programmed or planned to be programmed for the two ship classes. These 

costs are based on programming models including inputs based on regional man-day 

rates, a modular maintenance cost model, steaming day operating cost model, shore 

support cost model, and off-ship maintenance models. Additionally, these programming estimates only include direct costs associated with ship operations. The comparison based on the programming models is: 

Category DDG 1000 DDG 51 

Operating (Steaming) $18.5 $15.7 

Maintenance $10.3 $5.6 

Manpower $8.5 $19.9 

Total Annual $37.5 $41.2 

All costs in FY07 $.

Both of these sources are valid, but generated from different models/assumptions 

and are used for different purposes (comprehensive estimate of total ownership costs 

vs. budget programming). 

In both the programming budget comparison and the SAR data, DDG 1000 operating and support costs are slightly less than for the DDG 51, reflecting the lower 

manning of DDG 1000 but higher maintenance cost due to ship size and the transfer of a portion of traditionally crew-conducted maintenance to shore facilities. [See 

page 24.] 

RESPONSE TO QUESTION SUBMITTED BY MR. KENNEDY 

Admiral MCCULLOUGH. The DDG 51-class average days underway in FY07 was 

138 days. The DDG 1000 average days underway is projected to be 149 days per 

year. Underway days are based on a 91% historic availability of DDG 51 and a 94% 

predicted availability of DDG 1000. [See page 35.] 

RESPONSE TO QUESTION SUBMITTED BY MR. TAYLOR 

Mr. LABS. The cost of fuel that the Navy used in its comparison of operating costs 

of the DDG-51 destroyer and the DDG-1000 destroyer was $112.14 per barrel. The 

Navy performed that comparison in February 2008. [See page 40.] 

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