Navy's $7.8 Billion Destroyer Due for Delivery 5 Years Late

(Bloomberg) -- The first ship in the U.S. Navy’s $23 billion program to build a new class of destroyers is scheduled for a September delivery -- more than five years later than originally scheduled and 10 years after construction began on the stealthy vessels built by General Dynamics Corp.

Delivery plans for the Zumwalt-class guided missile destroyer have been a roller-coaster of changing milestones, most recently moved from May of this year to September, according to budget documents confirmed by a Navy spokeswoman. The ship isn’t expected to have an initial combat capability until September 2021, at least three years later than planned.

The latest delay for the first $7.8 billion vessel, designated the DDG-1000, may add to doubts that the Navy can build, outfit and deliver vessels on time and within cost targets. The service is seeking public and congressional support for plans to reach a 355-ship fleet by 2034 from 289 today, a 20-year acceleration over last year’s plan to reach that goal.

“The new information underscores the risks that we have reported on for many years: When the Navy pushes forward on lead ships without realistic cost, schedule and performance expectations, the result is ships that are late, over cost, and incomplete,” Shelby Oakley, the Government Accountability Office’s supervisor for naval systems reviews, said in an email.

‘Technologically Advanced’

General Dynamics’ Bath Iron Works in Maine began construction on the DDG-1000 in February 2009. The first ship in a class billed by the Navy as “the largest and most technologically advanced surface combatant in the world” arrived at its San Diego home port in December 2016.

David Hench, a spokesman for Bath Iron Works, said the company “completed its scope of work” that successfully accomplished “acceptance trials and demonstrating” the vessel’s hull, mechanical and electrical systems. Bath “is not the prime contractor for the ongoing combat systems portion of the ship’s completion now occurring in San Diego,” he added.

Colleen O’Rourke, a Navy spokeswoman, said the new delivery delay “is driven by a combination of ‘first-of-class’ construction challenges, a limited capacity of labor in specialized fields and the unexpected complexity of completing industrial work” while not disturbing crew quarters.

The program’s procurement cost also keeps increasing -- by $160 million in fiscal 2020, the 11th straight year of increases that cumulatively total more than $4 billion since 2010. The basic cost for procuring the three ships now planned has risen to just over $13.2 billion, according to newly filed budget documents and the Congressional Research Service. The $23 billion program also includes about $10 billion in research and development.

The DDG-1000 has a radar-evading stealth design. Raytheon Co. provides the vessel’s combat electronics.

From 32 to 3

The Zumwalt class started out as a 32-ship program with the primary mission of providing gun support to troops and Marines ashore, much like battleships during World War II. The Navy assumed that it would buy 20,000 “Long-Range Land Attack Projectiles” over the program’s life that were to fire 62 nautical miles from its twin 155mm “Advanced Gun Systems” made by BAE Systems Plc.

The program was reduced to just three vessels and the Navy planned to buy 2,400 projectiles -- raising the estimated cost for each munition to as much as $566,000, according to the Naval Sea Systems Command.

The price tag contributed to the Navy’s decision in December 2017 to change the destroyer’s mission from shore bombardment to surface warfare against other vessels, aimed with longer-range missiles. The Navy is still searching for options.

So the DDG-1000 will be delivered with its two guns “in an inactive state, pending selection of a suitable and affordable munition,” Navy spokesman William Couch said in an email. The Navy spent $505 million on the weapons.

With just three ships, the gun would require a “very expensive bullet” that doesn’t go as far as weapons now planned for a longer strike, Captain Kevin Smith, the destroyer’s program manager, said in an interview. But he said the destroyer can still be “a game-changing warship in the Pacific.”

James Geurts, the Navy’s assistant secretary for research, development and acquisition, said Wednesday that completing activation of the vessel’s combat system integration with contractor BAE Systems Plc is ongoing. “It’s got a fairly integrated” information technology system “that runs through the entire ship and so the test methodology, the checkout methodology” is “also maturing,” he said in an interview.

“We’ve had to work our way through those challenges” Geurts said.

Despite the latest delay in delivering the finished destroyer, the Navy let the DDG-1000 sail to British Columbia this month to link with the Royal Canadian Navy, according to a Navy press release. That allowed for the crew “to experience the hospitality of the Canadian port, as well as showcase the U.S. Navy’s newest class of destroyers.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

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