Defense Acquisitions: Zumwalt-Class Destroyer Program Emblematic of Challenges Facing Navy Shipbuilding
Published: 2008-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The U.S. Navy is about to begin construction of the first Zumwalt-class destroyer (DDG 1000) amid considerable uncertainties and a high likelihood of cost and schedule growth. Significant cost growth and schedule delays are persistent problems that continue to compromise the Navy's shipbuilding goals. This testimony focuses on (1) the challenges faced by the DDG 1000 program and (2) the strain such challenges portend for long term shipbuilding plans.
section_title: What GAO Found
paragraphs: From the outset, DDG 1000 has faced a steep challenge framed by technical sophistication, demanding mission requirements, and a cost and schedule budget with little margin for error. The Navy has worked hard to manage the program within these competing goals. Yet recently, the Navy has discussed canceling construction of the remaining five DDG 1000 ships. Although a cancellation may stem from fiscal necessity, it reflects poorly on the acquisition, requirements, and funding processes that produced the DDG 1000 business case. Future success in shipbuilding depends on understanding why the weaknesses in the DDG 1000 business case, which now seem to threaten the program, did not prompt a similar re-examination several years ago. The current program of record faces significant execution risks. The Navy will be pressed to complete a large amount of design work in time for the start of construction in October 2008. Demonstration of key components--particularly, the deckhouse, the volume search radar, and the integrated power system--have fallen behind. Despite restructuring the construction schedule, margins between several major events are gone. For example, land-based tests of the integrated power system are now scheduled after installation on the lead ships. Software development has also proven challenging; the Navy certified the most recent software release before it met about half of its requirements. Further, the full costs of constructing the two lead ships have not been entirely recognized or funded. The complexity and unique features of DDG 1000, along with the design work, testing, and actual construction experience to come, make cost growth beyond budgeted amounts likely. The challenges confronted by DDG 1000 are not unique. Across the shipbuilding portfolio, executing programs within cost and schedule estimates remains problematic, largely because of unexecutable business cases that allow programs to start with a mismatch between scope and resources. Collectively, problems in individual programs erode the buying power of the Navy's long-range construction budget. The Navy compensates for near-term construction deferrals by increasing construction in the out-years, but this will require significant funding increases in the future, which are unlikely. Near-term tradeoffs could have long-term consequences for maintaining a rational balance between mission capability, presence, industrial base, and manning. The Navy's consideration of cutting the DDG 1000 program back comes after over 10 years of development and $13 billion have been invested. Clearly, changes are needed in how programs are conceptualized and approved. Although the elements needed for success are well known, unrealistic compromises are made to make business cases conform to competing demands. An examination of the root causes of unexecutable business cases must be done or shipbuilding programs will continue to produce unsatisfactory outcomes. This examination must begin with an honest appraisal of the competing demands made on new programs early in the acquisition process and how to strike a better balance between them.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of the Navy’s  Zumwalt-class (DDG 1000) destroyer program, part of the family of future  surface combatants. Much of my statement is drawn from a detailed report  we issued today on the status of the program. DDG 1000 is an ambitious  program that is now in the first year of a 6-year construction schedule for  the two lead ships. Last week, the Navy began discussing cancellation of  the remaining five ships in the class. While a cancellation may stem from  fiscal necessity, it comes after well over 10 years of development and over  $13 billion in investments thus far. Future success in shipbuilding  programs depends on recognizing the factors that necessitated the  decision and taking steps to avoid having to do so again in the future.
Accordingly, today I will be discussing (1) the challenges faced by the  DDG 1000 program and (2) the strain such challenges portend for the  shipbuilding budget. I do this not as a critique of the Navy’s management  of the program (for there is much about the acquisition that exhibits  foresight and thoughtful planning), but as the latest in a series of  shipbuilding programs in which the scope of the program is a mismatch  for the time and money resources that have been allotted for it. These  mismatches result in reductions in quantities that, in turn, have a  collective effect on the Navy’s long-term shipbuilding goals. I look forward  to today’s hearing as an opportunity to discuss not only the symptoms of  the problem, but the root causes as well.
subsections: section_title: Navy Unlikely to Execute DDG 1000 Program within Current Cost and Schedule Estimates
paragraphs: The DDG 1000 program has from the onset faced a steep challenge framed  by demanding mission requirements, stealth characteristics, and a desire  to reduce manning levels by more than half that of predecessor destroyers.  These requirements translated into significant technical and design  challenges. Rather than introducing three or four new technologies (as is  the case on previous surface combatants), DDG 1000 plans to use a  revolutionary hull form and employ 11 cutting-edge technologies,  including an array of weapons, highly capable sensors integrated into the  sides of a deckhouse made primarily of composite material—not steel, and  a power system designed for advanced propulsion as well as high-powered  combat systems and ship service loads. This level of sophistication has  necessitated a large software development effort—14 million to 16 million  lines of code. All of this is to be accomplished while splitting construction  between two shipyards. The Navy believes this approach and schedule is  important to managing shipyard workloads, as starting later would have  caused shipyard workload to drop too low. In a sense, then, the  construction approach and schedule became an additional challenge as  they became constraints on the pace of technology and design  development. To meet these multiple and somewhat conflicting demands,  the Navy structured its acquisition strategy to develop key systems and  mature the design before starting to build the ship. While the Navy has  made good decisions along the way to address risk, it is already likely,  shortly before the Navy embarks on ship construction, that additional  funding will be necessary or trade-offs will need to be made to develop  and deliver DDG 1000 ships.
subsections: section_title: Despite a Thoughtful Approach, Delays in Technology, Software, and Design Development Pose a Risk to Successful Program Execution
paragraphs: Despite multiple and somewhat competing demands, the Navy conceived a  thoughtful approach and achieved developmental successes on DDG 1000.  Developing 10 prototypes of the ship’s critical systems helped to create  confidence that a number of technologies would operate as intended, and  the Navy’s plan to mature the ship’s design before starting construction  aims to reduce the risk of costly design changes after steel has been cut  and bulkheads built. For example, the Navy successfully demonstrated the  advanced gun system through initial guided flight and testing on land. In  other cases, such as for the integrated power system, tests brought to light  technical problems, which the Navy was able to address by going to an  alternate technology. However, notwithstanding these efforts, significant  challenges remain in developing the ship’s design and a number of key  components—in particular, the deckhouse, volume search radar, and the  integrated power system. Moreover, the ship’s capability is contingent on  an unprecedented software development effort. Recently, the Navy  restructured the schedule to buy more time for development—a good  decision. However, as construction of the first ship has not yet begun, the  Navy may have exhausted its options for solving future problems without  adding money and time.
Although the initial phases of the design are complete, the shipbuilders  will be pressed to complete a large amount of design work by October  2008 when lead ship construction begins. From August 2007 through May  2008, the shipbuilders finished work on 16 of the 100 design zones  (individual units that make up the ship’s design) leaving 5 months to finish  the final design phases in 84 zones leading up to the start of construction.  While the shipbuilders believe they can finish the design by the start of  ship construction, delays in the development of the ship’s key systems  could impede completion of the design and eventually interfere with DDG  1000 construction. If the shipbuilders cannot finish planned design work  prior to the start of lead-ship construction, the program is at greater risk  for costly rework and out-of-sequence work during construction.
To maintain the start of ship construction in 2008 while continuing to  develop the ship’s technologies, the Navy recently realigned the program’s  schedule. Rather than delivering a fully mission-capable ship, the Navy will  take ownership of just the vessel and its mechanical and electrical  systems—including the ship’s power system—in April 2013. At that point,  the Navy plans to have completed “light-off” of the power, mechanical, and  electrical systems. Light-off refers to activating and testing these systems  aboard ship. The Navy deferred light-off of the combat systems—which  include the radars, guns, and the missile launch systems—by over 2 years  until May 2013. According to the Navy, conducting light-off in phases  allows the program to test and verify the ship’s major systems, in  particular the integrated power system, in isolation and creates additional  time to mature the combat systems, as well as the software that supports  these systems, before ship installation and shipboard testing. However,  since the Navy will only test and inspect the hull prior to taking ownership  of the vessel, it will not have a full understanding of how the ship operates  as a complete and integrated system until after final shipboard testing of  the combat systems in 2014.
While the restructure maintains the construction schedule, it does delay  verifying the performance of the integrated power system before  producing and installing it on the ship. Tests of a complete integrated  power system with the control system will not occur until 2011—nearly 3  years later than planned. To meet the shipyard’s schedule, the Navy will  buy a power system intended for the third ship and use it in land-based  tests. As a result, the integrated power system will not be demonstrated  until a year after the power systems have been produced and installed on  the two lead ships—an approach that increases exposure to cost and  schedule risk in production.
Finalizing deckhouse manufacturing and assembly processes are essential  to constructing and delivering the deckhouse as planned. Changes to the  manufacturing processes for deckhouse production are ongoing. The  shipbuilder is validating process changes through production and  inspection of a series of test units, culminating with a large-scale prototype  manufactured to the same thickness and other specifications of the  deckhouse. Final validation of the manufacturing processes for deckhouse  construction will not occur until after construction, inspection, and shock  testing of the large-scale prototype. However, test and inspection activities  are not scheduled for completion until after the deckhouse production  readiness review in September 2008. Problems discovered during testing  and inspection may require additional changes to manufacturing methods.  Moreover, facility and machinery upgrades necessary to construct and  assemble the deckhouse are not all scheduled to be complete until March  2010—over a year after the start of construction of the first deckhouse.  While the shipbuilder expects to complete efforts to meet the construction  schedule, if difficulties occur, the deckhouses may not be delivered to the  shipyards on time, disrupting the construction sequence of the ships.
Further, the volume search radar (one of two radars in the dual band radar  system) will not be installed during deckhouse construction as initially  planned. Instead, installation will occur at the shipyard when the first ship  is already afloat, a more costly approach. The change was partly due to  delays in developing the volume search radar. Land-based demonstrations  of the volume search radar prototype originally planned to be done before  starting ship construction will not be completed until 2009—almost 2 years  later. Development difficulties center on the radar’s radome and transmit- receive units. The contractor has been unable to successfully manufacture  the radome (a composite shield of exceptional size and complexity), and  the transmit-receive units (the radar’s individual radiating elements) have  experienced failures operating at the voltage needed to meet range  requirements. While the Navy believes that the voltage problem has been  resolved, upcoming land-based tests will be conducted at a lower  voltage—and without the radome. The Navy will not demonstrate a fully  capable radar at its required power output until after testing of the first  production unit sometime before combat systems light-off in 2013.
Crucial to realizing DDG 1000’s required manning reductions is the ability  to achieve a high degree of computer automation. If the ship’s software  does not work as intended, crew size would need to be increased to make  up for any lack of automation. Given the risks associated with the ship’s  software system, referred to as the total ship computing environment, the  Navy initially planned to develop and demonstrate all software  functionality (phased over six releases and one spiral) over 1 year before  ship light-off. As a result of changes in the software development schedule,  the Navy eliminated this margin. Until recently, the Navy was able to keep  pace with its development schedule, successfully completing the first  three software releases. However, the Navy is now entering the complex  phases of software development when ship functionality is introduced.  The Navy certified release 4 without the release meeting about half of the  software system requirements, mainly because of issues coding the ship’s  command and control component—the heart of the ship’s decision-making  suite. Problems discovered in this release, coupled with the deferred work,  may signify larger software issues that could disrupt the development of  releases 5 and 6 and prevent the timely delivery of software to meet the  ship’s schedule.
section_title: DDG 1000 Costs Likely to Exceed Budget
paragraphs: Costs of the DDG 1000 ships are likely to exceed current budgets. If costs  grow during lead ship construction due to technology, design, and  construction risks, as experience shows is likely, remaining funds may not  be sufficient to buy key components and pay for other work not yet under  contract.
Despite a significant investment in the lead ships, the remaining budget is  likely insufficient to pay for all the effort necessary to make the ships  operational. The Navy estimates a total shipbuilding budget of $6.3 billion  for the lead ships. Of this amount, the Navy has approximately $363  million remaining in unobligated funds to cover its outstanding costs and  to manage any cost growth for the two lead ships, but known obligations  for the lead ships, assuming no cost growth during construction, range  from $349 million to $852 million (see table 1).
The main discrepancy is the current estimated cost of the combat systems.  In order to create a cash reserve to pay for any cost increases that may  occur during construction of the lead ships, the Navy has deferred  contracting and funding work associated with conducting shipboard  testing of the combat systems—and in some cases has also delayed  purchasing and installing essential ship systems until later in the  construction sequence. The Navy has estimated the cost of these combat  systems to be around $200 million, while the contractor’s estimate is over  $760 million. If the agreed-on cost approaches the contractor’s estimate,  the Navy will not have enough in its remaining funds to cover the cost.
There is little margin in the budget to pay for any unknown cost. To ensure  that there was enough funding available in the budget to cover the costs of  building the lead ships, the Navy negotiated contracts with the  shipbuilders that shifted costs or removed planned work from the scope of  lead ship construction and reduced the risk contingency in the  shipbuilders’ initial proposals. For example, the Navy stated that it shifted  in excess of $100 million associated with fabrication of the peripheral  vertical launch system from the scope of ship construction and funded this  work separately using research and development funding. As a result, this  work is no longer included in the $6.3 billion end cost to construct DDG  1000.
To the extent that the lead ships experience cost growth beyond what is  already known, more funding will be needed to produce operational ships.  However, these problems will not surface until well after the shipyards  have begun construction of the lead ships. Cost growth during  construction for lead ships has historically been about 27 percent, and an  independent estimate by the Department of Defense already projects the  cost of the two lead ships to be $878 million higher than the Navy’s budget.  With ships as expensive as DDG 1000, even a small percentage of cost  growth could lead to the need for hundreds of millions of dollars in  additional funding.
section_title: Program Execution Challenges Have Required the Navy to Make Trade-Offs In Its Long-Range Shipbuilding Goals
paragraphs: The challenges facing DDG 1000 are not unique among Navy shipbuilding  programs nor to Department of Defense acquisition programs at large.  Across the shipbuilding portfolio, the Navy has not been able to execute  programs within cost and schedule estimates, which has, in turn, led to  disruptions in its long-range construction plans. This outcome has largely  resulted from Navy decisions to move ships forward into construction  with considerable uncertainties—like immature technologies and unstable  designs. However, by doing so the Navy has effectively eroded its buying  power by forcing it to make near-term quantity reductions within its  shipbuilding plan. Because fleet requirements remain steady at 313 ships,  the Navy must compensate for near term construction deferrals by  increasing ship construction in the out-years. Achieving this plan,  however, will require significant funding increases in the future, which will  likely be difficult to obtain. These near term trade-offs could have long-  term consequences for balancing mission, presence, industrial base, and  manning tensions. For example, if ship quantities are deferred to the  future to accommodate near-term cost growth, the Navy could be trading  off presence and industrial base if additional funds do not materialize in  the future.
subsections: section_title: The Navy Consistently Underestimates the Effort Required to Successfully Execute Its New Shipbuilding Programs
paragraphs: Cost growth and schedule delays are persistent problems for shipbuilding  programs as they are for other weapon systems. These challenges are  amplified for lead ships in a class (see figs. 1 and 2).
The Navy’s six most recent lead ships have experienced cumulative cost  growth over $2.4 billion above their initial budgets. These cost challenges  have been accompanied by delays in delivering capability totaling 97  months across these new classes. The first San Antonio-class ship (LPD  17) was delivered to the warfighter incomplete and with numerous  mechanical failures—52 months late and at a cost of over $800 million  above its initial budget. For the LCS program, the Navy established a $220  million cost target and 2-year construction cycle for each of the two lead  ships. To date, costs for these two ships have exceeded $1 billion, and  initial capability has been delayed by 21 months. Cost increases are also  significant if the second ship is assembled at a different shipyard than the  first ship. This was the case with SSN 775, with cost growth of well over  $500 million.
These outcomes result from the Navy consistently framing its shipbuilding  programs around unexecutable business cases, whereby ship designs seek  to accommodate immature technologies and design stability is not  achieved until late in production. New ship programs have moved forward  through milestones, whether or not desired knowledge had been attained.  In turn, initial ships in Navy programs require costly, time-consuming out- of-sequence work and rework during construction, and undesired  capability trade-offs are often required. In essence, execution problems  are built into the initial strategy for a new ship, as the scope of the ship— that is, the innovative content and complexity owing to multiple mission  requirements—overmatches the time and money set aside to develop and  construct the ship. For example, while the scope of the DDG 1000 and  CVN 78 ships were driven by mission requirements, the schedules for  these ships was set by shipyard workload needs or by the retirement  schedule of a predecessor ship. The result is the scope of work is  compressed into a schedule that is based on something else.
LCS is a recent example. In this program, the Navy sought to concurrently  design and construct two lead ships in an effort to rapidly meet pressing  needs in the mine countermeasures, antisubmarine warfare, and surface  warfare mission areas. However, changes to Navy requirements required  redesign of major elements in both lead ships to provide enhanced  survivability, even after construction had begun on the first ship. While  these requirements changes improved the robustness of LCS designs, they  contributed to out-of-sequence work, rework, and weight increases on the  lead ships. These difficulties caused LCS construction costs to grow and  delivery schedules to be extended and prompted the Navy to reduce speed  requirements for the class due to degraded hydrodynamic performance. In  turn, the Navy canceled construction contracts for the third and fourth  ships and used funds from other previously appropriated ships to pay for  lead ship cost growth. Although these steps increased the resources  available to the two lead ships, continuing technology immaturity and  unproven watercraft launch and recovery systems included within each  design could trigger additional cost growth and schedule delays above and  beyond current estimates.
The Ford-class aircraft carrier (CVN 78) also faces uncertainty related to  its cost and schedule estimates and eventual capability. The business case  for CVN 78 is framed around delivering the carrier to maintain the Navy’s  force of 11 operational carriers given the impending retirement of USS  Enterprise (CVN 65), but includes a cost target that leaves little if any  margin for error. As construction begins, remaining technology risk in the  program—particularly with the electromagnetic aircraft launch system  (EMALS)—has positioned the program to face future construction  challenges similar to other lead ships. Previously, the Navy planned to  demonstrate full functionality of a ship-ready system prior to production  and installation on CVN 78—an approach aimed at reducing risk to ship  construction. However, the contractor encountered technical difficulties  developing the prototype generator and meeting detailed Navy  requirements which left no margin in the schedule to accommodate  unanticipated problems discovered in testing or production. In order to  maintain the ship’s construction schedule, the Navy adopted a test and  production strategy that will test, produce, and ultimately install EMALS  with a high degree of concurrency. At the same time test events are  occurring, the Navy will authorize and begin production of EMALS  intended for ship installation. While Navy officials recognize that  concurrency is undesirable, they believe it is the only way to meet the  ship’s delivery date in September 2015. However, by moving ahead with  production in order to accommodate schedule milestones, CVN 78 is at  risk of cost growth and ultimately schedule changes if unexpected  problems arise in EMALS testing.
section_title: Challenges Facing Current Programs Have Disrupted the Navy’s Long-Range Construction Plans
paragraphs: Since 2006, the Navy has annually issued a long-range plan for  shipbuilding. These plans outline expected new ship procurements 30  years into the future and the funding the Navy estimates will be needed to  support those procurements. The long-range plan is predicated upon the  stated fleet need for 313 ships. However, mounting cost and schedule  challenges in current programs have required the Navy to increasingly  reshape its long-range ship procurement plans, placing the 313 ship goal in  jeopardy.
The Navy’s long-range ship construction plan embodies multiple  objectives including    building sophisticated ships to support new and existing missions,  improving presence by increasing the numbers of ships available to  execute these missions,   designing ships and operating concepts that reduce manning    supplying construction workloads that stabilize the industrial base.
There is an inherent tension among the multiple objectives in the plan that  is depicted in simple form in figure 3.
This tension can play out in several ways. If, for example, a class of ship is  expected to perform multiple challenging missions, it will have  sophisticated subsystems and costs will be high. The cost of the ship may  prevent its being built in desired numbers, subsequently reducing presence  and reducing work for the industrial base. Requirements to reduce  manning can actually add sophistication if mission requirements are not  reduced. To some extent, this has happened with DDG 1000 as decisions  have tended to trade quantities (that affect presence and industrial base)  in favor of sophistication. Several years ago, the program was expected to  deliver 32 ships at an approximate unit cost of $1 billion. Over time,  sophistication and cost of the ship grew as manning levels lower than  current destroyers were maintained. Today, the lead ships are expected to  cost $8.9 billion in research and development funding and another $6.3  billion to build. Similarly, cost growth in the LCS program has precluded  producing ships at the rate originally anticipated, and it is possible the  Navy will never regain the recent ships it traded off to save cost. Had the  Navy anticipated that LCS lead ship costs would more than double, it may  have altered its commitment to the program within its previous long-range  shipbuilding plan.
The Navy’s fiscal year 2009 long-range ship construction plan reflects  many of the recent challenges that have confronted Navy shipbuilding  programs. The plan provides for fewer ships at a higher unit cost—in both  the near term and the long term—from what the Navy outlined in its fiscal  year 2008 plan. Across the next 5 years, the Navy now expects to fund  construction of 47 new ships at a cost of almost $74 billion. However, only  1 year ago the Navy expected to purchase 60 ships at a cost of $75 billion  during this same time span. Instead, as cost growth has mounted in  current shipbuilding programs, the Navy has had to reallocate funds  planned for future ships to pay for ones currently under construction.  These problems have also required the Navy to adjust its long-term plans.  To compensate for its recent near-term quantity reductions, the Navy now  plans to increase construction rates starting in fiscal year 2014. This  strategy is based upon the premise that increased funding—on the order of  $22 billion between fiscal years 2014 and 2018—will become available to  support its plans. The Navy assumes this trend of increased funding— above and beyond annual adjustments for inflation—will continue through  the end of its plan, which culminates in fiscal year 2038.
Cost and schedule pressures in current programs have also led the Navy to  make a number of operational trade-offs to help maintain the viability of  its shipbuilding goals. For instance, the Navy’s current long-range plan  includes a new provision to extend the service lives of current DDG 51  ships by 5 years to maintain an adequate number of surface combatants in  its fleet. In addition, the Navy plans to extend the service life of selected  attack submarines as well as the length of attack submarine deployments.  These actions, however, will require the Navy to increase funding for  future upgrades, modernization programs, and maintenance for these  vessels—from sources the long-range plan does not identify.
section_title: Concluding Remarks
paragraphs: The discussion over whether to conclude the DDG 1000 program at two  ships should prompt some introspection given that over $13 billion has  been spent. In a sense, some of the key factors influencing the  discussion—such as the high cost of the ship, the potential for cost  growth, and the questionable affordability of the 30-year shipbuilding  plan—are not markedly different from what they were a few years ago.  Future success in shipbuilding depends on understanding why the  weaknesses in the DDG 1000 business case, which now seem to threaten  the program, did not prompt a similar re-examination several years ago.
I believe that Navy managers and shipbuilders have enough knowledge  about cost estimating, technology development, engineering, and  construction to develop more executable business cases for new ships— that is, a better match between the scope of the ship and the time and  money allotted for delivering it. The fact remains that we do not get these  matches when they really count—before detail design and construction for  a new ship are approved. So, the question is, why are well-understood  elements of success not incorporated into new ship programs?
Part of the answer is that while managers may know what it takes to put  an executable business case together, compromises in judgment have to  be made to bring the business case in conformance with competing  demands. For example, in a program like the DDG 1000 that undertook  multiple technical leaps to meet challenging requirements, yet also had to  deliver in time to match shipyard availability, pressures existed to make  optimistic assumptions about the pace of technology maturity. At the same  time, budget constraints exert pressure on cost estimates to be lower.  These demands do not all fall just within the province of the Navy— industry, Congress, and the Office of the Secretary of Defense all play  important roles. Over time, the business case for DDG 1000 eroded. The  primary mission of DDG 1000—and the foundation for its business case— was land attack. Yet, subsequent decisions ultimately forced trade-offs in  that mission. For example, while including features like a more  sophisticated radar and stealth characteristics may be good decisions  individually, collectively they made the ship more expensive. Efforts to  contain cost involved both reducing the quantity of ships and the actual  land attack capability possessed by each individual ship. Ironically, the  advanced gun system, which was the primary land attack weapon of the  ship and a technical success to date, will now not have a platform to  operate from beyond the first two DDG 1000s.
The reconsideration of the DDG 1000 buy reflects poorly on the  requirements, acquisition, and funding processes that produced the ship’s  business case. Unless some attempt is made to examine the root causes of  decisions that hope for the best and result in poor outcomes, shipbuilding  programs seem destined to the same fate: despite the best efforts to  manage, the scope of the program will outstrip the cost and schedule  budget. This examination must begin with an honest self-appraisal of what  each player in the shipbuilding acquisition process demands of programs  in terms of requirements, technologies, design, industrial base, quantities,  and cost. Otherwise, while cost and other problems of current ships are  lamented, these same problems could continue to curb the outcomes of  future programs like the potentially sophisticated next-generation cruiser  (CG(X)) or even renewed construction of DDG 51.
Mr. Chairman, that concludes my statement. I would be pleased to answer  any questions.
section_title: Objectives, Scope, and Methodology
paragraphs: To develop information on the status of the DDG 1000 program, we relied  largely on our current work examining the DDG 1000 program, as well as a  number of prior GAO products on shipbuilding programs. We  supplemented this work with analysis of the Navy’s most recent and  previous long-range plan for ship construction and Selected Acquisition  Reports for current Navy ships. Finally, we updated our estimates of lead  ships costs through the use of the Navy’s budget justification  documentation.
section_title: Contact and Staff Acknowledgments
paragraphs: For future questions about this statement, please contact me at (202) 512- 4841 or francisp@gao.gov. Individuals making key contributions to this  statement include Marie P. Ahearn, Christopher R. Durbin, Brian Egger,  James Madar, Diana Moldafsky, Gwyneth B. Woolwine, and Karen  Zuckerstein.
section_title: Related GAO Products
paragraphs: Defense Acquisitions: Cost to Deliver Zumwalt-Class Destroyers Likely  to Exceed Budget. GAO-08-804. Washington, D.C.: July 31, 2008.
Defense Acquisitions: Assessments of Selected Weapon Programs. GAO- 08-467SP. Washington, D.C.: March 31, 2008.
Defense Acquisitions: Overcoming Challenges Key to Capitalizing on  Mine Countermeasures Capabilities. GAO-08-13. Washington, D.C.:  October 12, 2007.
Defense Acquisitions: Realistic Business Cases Needed to Execute Navy  Shipbuilding Programs. GAO-07-943T. Washington, D.C.: July 24, 2007  Defense Acquisitions: Navy Faces Challenges Constructing the Aircraft  Carrier Gerald R. Ford within Budget. GAO-07-866. Washington D.C.:  August 23, 2007.
Defense Acquisitions: Challenges Remain in Developing Capabilities in  Naval Surface Fire Support. GAO-07-115. Washington, D.C.: November 30,  2006.
Defense Acquisitions: Challenges Associated with the Navy’s Long-Range  Shipbuilding Plan. GAO-06-587T. Washington, D.C.: March 30, 2006.
Defense Acquisitions: Progress and Challenges Facing the DD(X)  Surface Combatant Program. GAO-05-924T. Washington, D.C.: July 19,  2005.
Defense Acquisitions: Plans Need to Allow Enough Time to Demonstrate  Capability of First Littoral Combat Ships. GAO-05-255. Washington, D.C.:  March 1, 2005.
Defense Acquisitions: Improved Management Practices Could Help  Minimize Cost Growth in Navy Shipbuilding Programs. GAO-05-183.  Washington, D.C.: February 28, 2005.
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