A U.S. Senate hearing on the Navy’s proposed winner-take-all strategy for destroyer construction may provide more funding for shipbuilding and prevent the Pentagon from shifting the DD (X) program to a single yard. While the Navy’s strategy is likely to lead to lower costs, an “apportionment” strategy ensures that the lower-ranked shipyard will still get enough work to remain in the industry.
At present, two shipyards build U.S. Navy destroyers: General Dynamics subsidiary Bath Iron Works in Maine, and Northrop-Grumman subsidiary Ingalls Shipbuilding in Mississippi. Ingalls won the competition to design the next generation DD (X) destroyer, but the production contract hasn’t been awarded yet.
Navy Secretary Gordon England had estimated that the current system adds $300 million to the cost of each destroyer when he unveiled the winner-take-all policy, a stance backed by Chief of Naval Operations Admiral Vernon Clark. In contrast, officials representing both of the shipyards that build Navy destroyers told the Senate Armed Services Subcommittee on Seapower last week that it would be a mistake to shift all production to one yard due to the long-term industry impact; a number of analysts and lawmakers appear to agree.
All sides agree that more predictable funding and spreading out costs rather than coming up with the money for each ship in a single year would help the industry. Shipbuilders depend on predictable funding and an opportunity for a decent return on investment, and shipbuilders have complained before about the “yo-yo” cycles caused by current procurement policies. To that end, there are proposals being floated in the Senate to reorient procurement along those lines and expand funding. AP: Senate Weighs New Navy Procurement Strategy