Buying Ships Becomes a Family Affair

he Navy kicked off a new era in ship design and construction this spring by awarding a multibillion-dollar contract for building a family of surface combat vessels. Like the Army and the Air Force, the Navy believes that transforming itself into a 21st century military force requires shelving single-system acquisition strategies in favor of bold plans to develop common weapons platforms that can provide more options and make better use of limited dollars.

The Navy originally had planned to award a contract for developing its next-generation destroyer, known as the DD-21, last fall. But the service delayed that award and announced it was no longer interested in buying only destroyers. Instead, Navy officials asked contractors to come up with plans for building a family of surface ships-including destroyers, cruisers and ships designed for combat in coastal waters. In April, Northrop Grumman was awarded a $2.9 billion multiyear contract under the new program, which was re-christened the DD(X).

In announcing the program's shift last fall, Deputy Defense Secretary Paul Wolfowitz said, "President Bush has made transformation of the Department of Defense a high priority. Through DD(X), the Navy has charted a course to transformation that will provide capability across the spectrum of naval warfare. The Navy's strategy supports assured access to [coastal] regions and also develops the capability to defeat air and missile defense threats the nation's naval forces will face in the future."

The DD(X) design contract accounts for only a fraction of the potential value of a contract-to be awarded in 2005-to build the new ships. The Navy could spend as much as $100 billion buying more than 70 surface combatant ships under the DD(X) program over the next several decades.

In the meantime, Chief of Naval Operations Adm. Vernon Clark told lawmakers in April that the Navy's proposed $24.8 billion procurement budget for fiscal 2003 would require the service to scale back its fleet. "To sustain the size of the current fleet, we would need to buy an average of 180 to 210 aircraft and nine ships a year. We are currently procuring significantly less that that," said Clark at a Senate Armed Services Committee hearing.

The fiscal 2003 budget would allow the Navy to buy 83 aircraft and five ships. Clark said the Navy would search for savings so it could increase procurement spending over the next two years. "Failure to free such resources would have a profoundly negative impact on the fleet," he said.

Clark said he was particularly concerned about aircraft. The Navy has the oldest mix of planes in its history and they are flying more frequently than ever before. More than 300 of the Navy's F/A-18s have flown longer than originally expected and will need overhauls sooner than planned if they are to remain in service.

"The best way to address such problems is to introduce new aircraft into the fleet as soon as possible," Clark told the committee.

The Marine Corps, whose procurement dollars are included in the Navy's budget, faces a crucial crossroads for its top modernization project, the V-22 Osprey tilt-rotor aircraft. The proposed 2003 budget calls for buying 11 of the aircraft at a cost of $68 million apiece, but the service has only recently resumed testing the Osprey after it was grounded in 2000 following two crashes that killed 23 Marines. The Marine Corps hopes to purchase 360 V-22s at a cost of $45 billion.