The Navy’s Study May Not Provide a Sufficient Basis for a Sound, Long-Term Acquisition Program

The Radar/Hull Study may not provide a sufficient analytical basis given  the magnitude of the Navy’s acquisition decision, including up to 43  destroyers (22 of which will be in the Flight III configuration and 21 in a  later Flight IV configuration, and both may require significant ship  redesign), a new radar, and major combat system upgrades. Other  than assessing the BMD capability that Aegis currently possesses and  the absence of BMD capability in TSCE, the Navy evaluated Aegis and  TSCE by focusing on the amount of new software code that it estimated  would be required to integrate the radars and to effectively perform IAMD  and the costs and risks involved in this development. Radar/Hull Study Did Not Include a Robust Trade-off Analysis to Inform a Sound Decision

The Radar/Hull Study did not include a robust trade-off analysis for the  variants studied to support the Navy’s DDG 51 selection decision, which  is currently planned to result in an acquisition of 22 modified Flight III  DDG 51s and a further 21 modified DDG 51s known as Flight IV. Restart Ships are Costlier than Recent DDG 51s and Face a Challenging Combat System Upgrade

According to the Navy and shipbuilders, the changes to the restarted  DDG 51’s hull and mechanical systems appear less substantial than  previous modifications to earlier DDG 51s. Although the Navy plans to install and test this upgrade on  an older DDG 51 (DDG 53) prior to installation on DDG 113, delays in  these efforts could pose risks to a timely delivery in support of DDG 113  and ability to mitigate risk. Even if current  testing goes as planned, the Navy has not planned for realistic  operational testing necessary to ensure that the Aegis upgrades are  capable of performing IAMD against multiple ballistic and cruise missile  targets. Combat System Upgrade Has Faced Delays, and Key Testing Is Undefined

A major change for the restart ships is a significant upgrade to the Aegis  combat system currently under way. Contractor officials told us that they plan to deliver the combat system  hardware to the shipyard for installation on DDG 113 in May 2013. While the Navy is pursuing a thoughtful approach to  AMDR development, it faces several significant technical challenges that  may be difficult to overcome within the Navy’s current schedule. Further, the  Navy’s choice of DDG 51 as the platform for AMDR limits the overall size  of the radar to one that will be unable to meet the Navy’s desired  (objective) IAMD capabilities. Navy Acquisition Approach for Flight III Not Commensurate with Risks

Costs of the lead Flight III ship will likely exceed current budget estimates. Beginning in  2019, the Navy will face significant constraints on its shipbuilding account  as it starts procuring new ballistic missile submarines to replace the  current Ohio class. The Navy currently estimates that this program will  cost approximately $80.6 billion in procurement alone, with production  spanning over a decade. Given the potential technology, design, and construction risks, and level  of the investment, the current level of program oversight for DDG 51  Flight III may not be sufficient. Conduct a thorough AOA in accordance with DOD acquisition  guidance for its future surface combatant program to include: (a) a  range of representative threat environments developed in concert with  the intelligence community; (b) results of its ongoing Flight III studies  and full cost estimates in advance of awarding DDG 51 Flight III  production contracts; (c) implications of the ability of the preferred ship  to accommodate new technologies on future capabilities to determine  the most suitable ship to carry AMDR and meet near-term IAMD  requirements and provide a path to far-term capabilities; (d)  implications on future fleet composition; and (e) an assessment of  sensor netting—conducted in consultation with MDA and other  cognizant DOD components—to determine the risks inherent in the  sensor netting concept, potential current or planned programs that  could be leveraged, and how sensor netting could realistically be  integrated with the selected future surface combatant to assist in  conducting BMD. We believe that this  recommendation remains valid. To help ensure that the department makes a sound  investment moving forward, Congress should consider directing the  Secretary of Defense to:    1.  require the Navy to submit a thorough, well-documented AOA for  the its future surface combatant program that follows both DOD  acquisition guidance and the elements outlined in our first  recommendation prior to issuing solicitations for any detail design  and construction contracts of DDG 51 Flight III ships;   2.  elevate the ACAT status of the DDG 51 Flight III to an ACAT ID  level if the decision is made to continue pursuing the program; and   3.  include the lead DDG 51 Flight III ship in a multi-year procurement  request only when the Navy has adequate knowledge about ship  design, cost, and risk. Appendix I: Objectives, Scope, and Methodology

The overall objectives of this review were to assess (1) the Navy’s  determination of the most appropriate platform to meet current and future  surface combatant requirements; (2) the differences in cost, schedule,  and design of the restart DDG 51 destroyers compared with previous  ships, and the risks associated with the restart; and (3) the feasibility of  the Navy’s plans for maturing and integrating new technologies into the  future DDG 51 ships. We also reviewed  the Operational Requirements Document for the DDG 1000 and the draft  Capability Definition Document for the Air and Missile Defense Radar  (AMDR).
Why GAO Did This Study

After nearly a decade and almost $10 billion in development on Zumwalt class destroyers, the Navy changed its acquisition approach from procuring Zumwalts to restarting production of Arleigh Burke class destroyers (DDG 51) and building a new version, known as Flight III. As requested, GAO reviewed the Navys plans for DDG 51 and missile defense capabilities by (1) evaluating how the Navy determined the most appropriate platform to meet surface combatant requirements; (2) identifying and analyzing differences in design, cost, and schedule of the restart ships compared with previous ships; and (3) assessing the feasibility of Navy plans for maturing and integrating new technologies and capabilities. GAO analyzed Navy and contractor documentation and interviewed Navy, contractor, and other officials.

What GAO Found

The Navy relied on its 2009 Radar/Hull Study as the basis to select DDG 51 over DDG 1000 to carry the Air and Missile Defense Radar (AMDR) as its preferred future surface combatanta decision that may result in a procurement of up to 43 destroyers and cost up to $80 billion over the next several decades. The Radar/Hull Study may not provide a sufficient analytical basis for a decision of this magnitude. Specifically, the Radar/Hull Study:
focuses on the capability of the radars it evaluated, but does not fully evaluate the capabilities of different shipboard combat systems and ship options under consideration,
does not include a thorough trade-off analysis that would compare the relative costs and benefits of different solutions under consideration or provide robust insight into all cost alternatives, and
assumes a significantly reduced threat environment from other Navy analyses, which allowed radar performance to seem more effective than it may actually be against more sophisticated threats.
The Navys planned production schedules of the restart DDG 51 ships are comparable with past performance and officials told us that hull and mechanical systems changes are modest, but these ships will cost more than previous DDG 51s. A major upgrade to the ships combat system software also brings several challenges that could affect the restart ships, due in part to a key component of this upgrade that has already faced delays. Further delays could postpone delivery to the shipyard for the first restart ship, and could also jeopardize the Navys plan to install and test the upgrade on an older DDG 51 prior to installation on the restart ships. This first installation would serve to mitigate risk, and if it does not occur on time the Navy will be identifying, analyzing, and resolving any combat system problems on the first restart ship. Further, the Navy does not plan to fully test new capabilities until after certifying the upgrade as combat-ready, and has not planned for realistic operational testing necessary to fully demonstrate its integrated cruise and ballistic missile defense performance.
The Navy faces significant technical risks with its new Flight III DDG 51 ships, and the current level of oversight may not be sufficient given these risks. The Navy is pursuing a reasonable risk mitigation approach to AMDR development, but it will be technically challenging. According to Navy analysis, selecting the DDG 51 hullform to carry AMDR requires significant redesign and reduces the ability of these ships to accommodate future systems. This decision also limits the radar size to one that will be at best marginally effective and incapable of meeting the Navys desired capabilities. The Navy may have underestimated the cost of Flight III, and its plan to include the lead ship in a multiyear procurement contract given the limited knowledge about the configuration and the design of the ship creates potential cost risk. Finally, the current level of oversight may not be commensurate with a program of this size, cost, and risk and could result in less information being available to decision makers.

What GAO Recommends

GAO is making several recommendations to the Secretary of Defense, including requiring the Navy to conduct thorough analyses of alternatives for its future surface combatant program and conduct realistic operational testing of the integrated missile defense capability of the DDG 51s upgrade, ensuring that the Navy does not include the lead Flight III ship in a multiyear procurement request, and raising the level of oversight for this program. DOD agreed with the recommendations to varying degrees, but generally did not offer specific actions to address them. GAO believes all recommendations remain valid and has included matters for congressional consideration to ensure the soundness of the Navys business case.