Overview

The Navy has been procuring Arleigh Burke (DDG-51) class Aegis destroyers since FY1985. The two DDG-51s requested for procurement in FY2018 are to be the 78th and 79th ships in the class. DDG-51s procured in FY2013-FY2017 were procured under a multiyear procurement (MYP) contract. As part of its FY2018 budget submission, the Navy is requesting authority to use another MYP contract to procure DDG-51s in FY2018-FY2022. The Navy plans to shift in FY2016 or FY2017 to a new variant of the DDG-51, called the Flight III DDG-51, that is to incorporate a new and more capable radar called the Air and Missile Defense Radar (AMDR) or the SPY-6 radar. The Navy estimates the combined procurement cost of the two DDG-51s requested for procurement in FY2018 at $3,499.1 million. The Navy's proposed FY2018 budget requests: $3,499.1 million in procurement funding to fully fund the procurement of the two DDG-51s requested for FY2018; $90.3 million in EOQ (economic order quantity) advance procurement (AP) funding for up-front batch orders of components for DDG-51s to be procured under the proposed DDG-51 MYP contract for FY2018-FY2022; $51.4 million in cost-to-complete procurement funding to cover cost growth on DDG-51s procured in prior fiscal years; $224.0 million in procurement funding to cover costs for building DDG-1000 class destroyers procured in prior fiscal years; and $32.1 million in research and development funding for the AMDR. Issues for Congress for FY2018 for the DDG-51 and DDG-1000 destroyer programs include the following: whether to approve, reject, or modify the Navy's requests for FY2018 procurement and research and development funding for the DDG-51 and DDG-1000 programs; whether to approve, reject, or modify the Navy's request for authority for a new MYP contract for DDG-51s to be procured in FY2018-FY2022; whether one of the DDG-51s procured in FY2016 should be built to the Flight III design, as the Navy has planned, and how this may relate to the previous issue of whether to approve, reject, or modify the Navy's request for authority for a new MYP contract for DDG-51s to be procured in FY2018-FY2022; whether to provide funding for the procurement in FY2018 of one or two additional DDG-51s (i.e., whether to provide funding for the procurement in FY2018 of a total of three or four DDG-51s); continued cost growth in the DDG-1000 program; cost, schedule, and technical risk in the Flight III DDG-51 effort; and the lack of an announced Navy roadmap for accomplishing three things in the cruiser-destroyer force: restoring ship growth margins; introducing large numbers of ships with integrated electric drive systems or other technologies that could provide ample electrical power for supporting future electrically powered weapons; and introducing technologies for substantially reducing ship operating and support (O&S) costs.

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