The Times Record is doing a great job keeping track of every move and counter move this political season in regards to the DDG-1000. Last week the news covered the costs associated with stopping the production line of the DDG-1000, which would ultimately send the DDG-1000 costs way up. They also covered the announcement that Secretary of the Navy Donald Winter will be visiting Bath Iron Works on June 17th, a visit that will ultimately mean little to the political debate playing out between the House and the Senate.
Today the Times Record is covering what we consider the news of Monday, Gene Taylor's new alternative for allowing the Navy to keep the DDG-1000. We recognize this as an unreasonable request, but we also recognize that it is counter to the unreasonable estimates, so in a way all Gene Taylor is really doing is highlighting that the DDG-1000 is quite simply, unreasonable in many ways.
One of the most vocal opponents of the DDG-1000 destroyer program wrote Friday that he would "remove my objections" if the new destroyers could be built for just $2.6 billion apiece. But U.S. Rep. Gene Taylor, D-Miss., doubts that can be done...Gene Taylor then goes on to channel a bit of Mike Burleson, invoking the term debacle in association with the DDG-1000 program.
"(Chief of Naval Operations Adm. Gary Roughead) estimates that DDG-1002 (the third ship in the series) and follow-on ships could be built for $2.6 billion per ship," wrote Taylor. "I would remove my objections to the DDG-1000 program if you could certify that any shipbuilder would be willing to enter into a firm fixed-price contract at that cost. From a business perspective, this is unlikely to happen because the shipbuilders know that the Navy's estimates are unrealistic."
The oft-stated price tag for one of the state-of-the-art destroyers is $3.6 billion, and the flagship DDG-1000 represents the most lucrative ship contract ever awarded to Bath Iron Works. BIW, which is sharing lead shipyard duties with Pascagoula, Miss.-based Ingalls Operations, is also hoping to build the third warship in the program with federal dollars set aside in fiscal year 2009.
"Navy shipbuilding has experienced significant setbacks in recent years and the DDG-1000 program could easily become the next major debacle for Navy acquisition," wrote Taylor, who reiterated concerns that the expensive DDG-1000s could cannibalize other Navy programs in the federal budget.Show of hands among those who believe a DDG-1000 can be built for $2.6 billion. The fact is, of the last 10 first in class shipbuilding programs, 5 have been over cost estimates by more than 100%. The Zumwalts are special though, DDG-1000 and DDG-1001 are both first in class, resulting in two first in class ships. Odds suggest that at least one will be over budgeted cost by more than 100%, which means somewhere in the neighborhood of $7 billion dollars... for a single surface combatant. When it is all said and done, the first two DDG-1000s could very easily cost as much as a brand new CVN... Ford class. The Navy's budget assessment of the DDG-1000 is unreasonable, so Gene Taylor is rightfully making an equally unreasonable counter proposal, or doing what can also be called standing his ground. He can afford to do this because Gene Taylor is standing on the high ground, both politically and realistically.
"Naval analysts at the Congressional Budget Office, the Congressional Research Service, and the Government Accountability Office all predict hundreds of millions of dollars in cost overruns for each ship in the class," wrote Taylor, in part. "If Congress authorizes the DDG-1000 program of record, any cost overruns for the program will most likely not become obvious until at least half of the planned seven vessels are placed under contract.
"This will subject the Navy's budget to significant financial liability and could cripple Navy shipbuilding plans," he continued. "Other vital ship programs, such as the Virginia-class submarines, the San Antonio-class amphibious assault ship, the Maritime Propositioning Force (Future), and the Littoral Combat Ship would have to be significantly curtailed to cover this liability."
A fixed cost $2.6 billion dollar cap on the DDG-1000 will be rejected, Gene Taylor is making an unreasonable request that is impossible to profit from. BIW is without question the most important shipyard in America right now, but the reality of the situation is BIW finds itself in this situation because they drank the kool-aid regarding the DDG-1000, believed the Navy when all signs suggested it was unreasonable to do so. Testimony in front of Congress going back to 2004 highlighted there would be a huge problem with surface combatant construction right now if the DDG-1000 proved to be too expensive, and the Senate ignored all that testimony pushing for this monstrosity of a battleship. Alternative plans over the years included building the FFG(X) until 2004 (PDF), DDG-51s to sustain construction in FY2005 and FY2006 (PDF), and in 2007 the DDG-1000 was shoved through the budget. Now its time to prepare FY2009 and there is no plan B.
The only way forward to sustain construction at BIW over the next 12 years is to immediately, starting this fiscal year start designing a small surface combatant that can be built in large numbers, essentially a ship that uses mature technology and doesn't integrate expensive systems like AEGIS. This isn't the first time BIW has been in this exact situation, and in what is great irony, it was Admiral Zumwalt Jr. who turned to Bath last time to build a small surface combatant resulting in both a larger Navy. 30 years later those ships need replacement, building them 30 years ago ultimately what saved BIW during tough times, and can do the same thing today.
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