A U.S. Navy program to develop and build 10 new destroyers will require at least $5 billion more than is budgeted, according to a Pentagon cost estimate.
According to Bloomberg News, the Navy’s estimate is $15 billion compared to the Pentagon’s independent Cost Analysis Improvement Group, which puts the cost at $20
billion or about 33 percent more, according to internal briefing charts compiled last month. General Dynamics Corp. and Northrop Grumman Corp. are the lead contractors on the program.
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“A difference this large between the CAIG and the Navy is fairly dramatic, particularly at this stage, since the potential cost of the DD(X) design has been an issue going back to last year, if not earlier,” said Ronald O’Rourke, a naval analyst for the nonpartisan Congressional Research Service. The program is in early design development.
The DD(X) is one of four major U.S. ship programs. All are running well above budget. The others are the Virginia-class submarine, the LPD-17 amphibious warfare vessel and the CVN-77 aircraft carrier. The Pentagon in December cut two vessels and $3
billion from the Navy’s fiscal 2006-2011 spending plan.
“If the CAIG estimate is accepted as the basis for going ahead, that will make it even more challenging under current budget conditions, for the Navy to ever procure more than one DD(X) per year,” O’Rourke said. The service has said it wants to buy at least two annually.
Navy spokesman Lt. Jon Spiers said the Navy stands by its DD(X) cost estimate.
