Navy Orders Two More (And Last Two) Zumwalt Class Destroyers from General Dynamics

by: Matthew Potter
September 16, 2011

Category: Business Line, Companies, General Dynamics, missile defense, Northrop Grumman Corp., production program | RSS 2.0

Last month it was reported that the U.S. Navy and General Dynamics (GD), owner of the Bath Iron Works (BIW) in Maine, were still negotiating the cost of the next two DDG-1000 Zumwalt class destroyers. In August a price had been worked out and this week the contract for the two ships was executed at an agreed on price of about $1.8 billion.

The Zumwalt was supposed to go into series production and become the standard destroyer for the Navy but due to escalating costs with the development and production the Navy decided to only build two and re-start the production line for the previous DDG-51 Arleigh Burke class destroyers. The Arleigh Burkes are built both at BIW and at Huntington Ingalls Industries (HII) yard in Mississippi.

The first DDG-1000 ship, the Admiral Zumwalt, is expected to be delivered in 2014. These two ships will be completed after 2015.

The Navy had decided to hold the class at two but Congress authorized the third one after the plans to end the program were announced.

The Zumwalt will integrate several pieces of new technology which is one of the reasons that the development costs grew from initial plans. This includes the new Air and Missile Defense Radar (AMDR) that will replace the current AN/SPY-1 that is part of the AEGIS Weapon System on current U.S. Navy cruisers and destroyers as well as a hybrid-drive and stealth qualities. The plan is to add these systems to the DDG-51 new construction.

There are now reports that the Government Accountability Office (GAO) is reviewing how the Navy did their cost analysis and the assumptions to come up with the new plan. There are also concerns that adding the AMDR and other systems to the Burkes may not be as easy as hoped. There are concerns that costs of doing all this may actually make the decision to not build more Zumwalts not necessarily as cost effective as thought.

There was a need to get this contract awarded as any delays would make it hard for BIW to have space available for the next production order of DDG-51 class ships making it hard for them to win that work. Without it the yard would have little construction available after completion of the three Zumwalts.

The award of this contract means that the timing should work out for BIW. There have been many concerns raised that the Navy is not ordering enough ships over the next few decades to support the current naval construction capability. This is one of the reasons that Northrop Grumman (NOC) spun off HII as a separate company. As the work on reducing the U.S. budget deficit continues this too may affect planned ship building programs.

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