Navy DD(X), CG(X), and LCS Ship Acquisition Programs: Oversight Issues and Options for Congress

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Navy DD(X), CG(X), and LCS Ship Acquisition Programs: Oversight Issues and Options for Congress Order Code RL32109 CRS Report for Congress Received through the CRS Web Navy DD(X), CG(X), and LCS Ship Acquisition Programs: Oversight Issues and Options for Congress Updated April 21, 2005 Ronald O’Rourke Specialist in National Defense Foreign Affairs, Defense, and Trade Division Congressional Research Service ˜ The Library of Congress Navy DD(X), CG(X), and LCS Ship Acquisition Programs: Oversight Issues and Options for Congress Summary The Navy in FY2006 and future years wants to procure three new classes of surface combatants — a destroyer called the DD(X), a cruiser called the CG(X), and a smaller surface combatant called the Littoral Combat Ship (LCS). Congress in FY2005 funded the procurement of the first LCS and provided advance procurement funding for the first DD(X), which the Navy wants to procure in FY2007. The FY2006-FY2011 Future Years Defense Plan (FYDP) reduces planned DD(X) procurement to one per year in FY2007-FY2011 and accelerates procurement of the first CG(X) to FY2011. The FY2006 budget requests $666 million in advanced procurement funding for the first DD(X), which is planned for procurement in FY2007, $50 million in advance procurement funding for the second DD(X), which is planned for procurement in FY2008, and $1,115 million for DD(X)/CG(X) research and development. The budget requests $613.3 million for the LCS program, including $240.5 million in research and development funding to build the second LCS, $336.0 million in additional research and development funding, and $36.8 million in procurement funding for LCS mission modules. On April 20, 2005, Department of Defense (DOD) issued a decision deferring as “premature” a Navy proposal to hold a one-time, winner-take-all competition between Northrop Grumman’s Ship System Division (NGSS) and General Dynamics’ Bath Iron Works (GD/BIW) for the right to build all DD(X)s. Several Members of Congress have expressed opposition to this idea. The Emergency Supplemental Appropriations Act for 2005 (H.R. 1268) as reported in the Senate contains a provision (Sec. 1119) that would effectively prohibit such a competition. The DD(X), CG(X), and LCS programs raise several oversight issues for Congress. Options for Congress for the DD(X) program include approving the program as proposed by the Navy and supplementing the industrial base, if needed, with additional work; accelerating procurement of the lead DD(X) to FY2006 and the second DD(X) to FY2007; deferring procurement of the lead DD(X) to FY2008; procuring two or more DD(X)s per year; building DD(X)s at a single yard, or building each DD(X) jointly at two yards; terminating the DD(X) program now (or after procuring a single ship as a technology demonstrator), and supplementing the industrial base with additional work until the start of CG(X) procurement; and starting design work now on a smaller, less expensive alternative to the DD(X) and procuring this new design, rather than DD(X)s or CG(X)s, starting around FY2011. Options for Congress on the LCS program include shifting procurement funding for LCS mission modules to the Navy’s ship-procurement account; procuring a few LCSs and then evaluating them before deciding whether to put the LCS into larger-scale series production; procuring LCSs at a rate of up to 10 per year; procuring LCSs at a rate of less than 5 per year; terminating the LCS program and instead procuring a new-design frigate; and terminating the LCS program and investing more in other littoral-warfare improvements. This report will be updated as events warrant. Contents Introduction ......................................................1 Background ......................................................2 Surface Combatants in the Navy ..................................2 Surface Combatant Force-Structure Goal ...........................6 Surface Combatant Industrial Base ................................7 Surface Combatant Acquisition Programs ...........................9 Oversight Issues for Congress.......................................23 Oversight Issues For Force-Structure Planning......................24 Oversight Issues For DD(X) and CG(X) Programs...................25 Oversight Issues For LCS Program...............................36 Options for Congress..............................................53 Options for DD(X) and CG(X) Programs ..........................53 Options for LCS Program ......................................59 Legislative Activity on DD(X) and LCS Programs.......................61 DD(X) Program..............................................61 LCS Program................................................71 Appendix A. Acronyms............................................80 Appendix B. Navy Testimony Supporting LCS as Best Approach ...........82 Navy Testimony..............................................82 Journal Articles ..............................................84 Appendix C. CBO and CSBA Studies Questioning LCS as Best Approach....85 CBO Report.................................................85 May 2003 CSBA Report .......................................85 Journal Articles ..............................................88 List of Tables Table 1. Funding For DD(X)/CG(X) Program, FY2002-FY2011 ...........18 Table 2. Funding For LCS Program, FY2002-FY2009 ...................23 Table 3. Actual and Proposed Destroyer-Cruiser Procurement .............34 Table 4. Coast Guard Deepwater Cutter Procurement Quantities ...........58 Navy DD(X), CG(X), and LCS Ship Acquisition Programs: Oversight Issues and Options for Congress Introduction The Navy in FY2006 and future years wants to procure three new classes of surface combatants — a destroyer called the DD(X), a cruiser called the CG(X), and a smaller surface combatant called the Littoral Combat Ship (LCS). Congress in FY2005 funded the procurement of the first LCS and provided advance procurement funding for the first DD(X), which the Navy wants to procure in FY2007. The FY2006-FY2011 Future Years Defense Plan (FYDP) reduces planned DD(X) procurement to one per year in FY2007-FY2011 and accelerates procurement of the first CG(X) to FY2011. The FY2006 budget requests $666 million in advanced procurement funding for the first DD(X), which is planned for procurement in FY2007, $50 million in advance procurement funding for the second DD(X), which is planned for procurement in FY2008, and $1,115 million for DD(X)/CG(X) research and development. The budget requests $613.3 million for the LCS program, including $240.5 million in research and development funding to build the second LCS, $336.0 million in additional research and development funding, and $36.8 million in procurement funding for LCS mission modules. On April 20, 2005, Department of Defense (DOD) issued a decision deferring as “premature” a Navy proposal to hold a one-time, winner-take-all competition between Northrop Grumman’s Ship System Division (NGSS) and General Dynamics’ Bath Iron Works (GD/BIW) for the right to build all DD(X)s. Several Members of Congress have expressed opposition to this idea. The Emergency Supplemental Appropriations Act for 2005 (H.R. 1268) as reported in the Senate contains a provision (Sec. 1119) that would effectively prohibit such a competition. The issue for Congress is whether to approve, modify, or reject the Navy’s proposals for the DD(X) and LCS programs. Surface combatants are a major component of the Navy, and construction of surface combatants represents a significant share of the Navy’s shipbuilding program. Decisions that Congress makes on procurement of surface combatants will thus significantly affect future Navy capabilities, Navy funding requirements, and the U.S. defense industrial base. Two short CRS reports — CRS Report RS21059 and CRS Report RS21305 — provide introductory overviews of the DD(X) and LCS programs, respectively, for CRS-2 readers seeking a short discussion of each program.1 This long CRS report discusses these programs in more depth, particularly with regard to oversight issues and options for Congress. The next section of the report provides background information on Navy surface combatants. The following section discusses potential oversight issues for Congress relating to surface combatant force-structure planning, the DD(X) program, and the LCS program. The subsequent section presents options for Congress on the DD(X) and LCS programs. A final section presents recent legislative activity on the two programs. This report will be updated as events warrant. Background Surface Combatants in the Navy2 A Major Component of the Navy. Surface combatants are one of four major types of Navy combat ships, along with aircraft carriers, submarines, and amphibious ships.3 Historically, surface combatants have accounted for 30% to 40% of the Navy’s battle force ships.4 At the end of FY2004, they accounted for about 35% (103 of 291 battle force ships).5 1 CRS Report RS21059, Navy DD(X) and CG(X) Programs: Background and Issues for Congress, by Ronald O’Rourke; and CRS Report RS21305, Navy Littoral Combat Ship (LCS): Background and Issues for Congress, by Ronald O’Rourke. 2 For additional background information on surface combatants, see U.S. Congressional Budget Office, Transforming the Navy’s Surface Combatant Force, March 2003, pp. 4-17; and CRS Report 94-343 F, Navy DDG-51 Destroyer Procurement Rate: Issues and Options for Congress, by Ronald O’Rourke. (Archived, available from author.) 3 The Navy’s fleet also includes mine warfare and support ships. Aircraft carriers, though sometimes referred to as surface
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