RESPONDING TO LOTT, DOD STARTS FUNDING LHD-9 AND ONE MORE DDG-51

January 28, 2002

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At the urging of Senate Minority Leader Trent Lott (R-MS), the Pentagon has made last minute adjustments to the Navy's shipbuilding plan in the Bush administration's fiscal year 2003 budget. The Pentagon put $74 million more toward a third DDG-51 destroyer and allocated $10 million in advance procurement for a ninth LHD amphibious ship that was not previously in the budget.

The FY-03 funding for a ninth LHD could signal the Pentagon will select modified LHDs to replace the Marine Corps' aging LHA amphibious vessels. However, some on Capitol Hill believe there is interest in building a modified LHD for future use by special forces. It is possible LHD-9 could be built with a "plug" that makes it larger.

LHD ships are built by Northrop Grumman's Ingalls shipyard in Pascagoula, MS. DDG-51 destroyers are built by Ingalls and its competitor, General Dynamics' Bath Iron Works in Bath, ME.

The budgeting of $10 million toward LHD-9 could prompt some concern at Pentagon and on Capitol Hill because the money was taken at the last minute from the LPD-17 amphibious dock ship program the Navy is pursuing for the Marine Corps, sources indicated. Further, Navy officials have publicly said the service is undecided as to what kind of ship will replace the aging LHAs, though some form of LHD is being considered.

The $74 million put toward a third DDG-51 in FY-03 is added to $125 million previously appropriated by Congress for the destroyer program, meaning a total of $199 million has been put toward the third ship, a source tracking the issue said.

The changes were made after Lott recently sent a letter to the Pentagon's senior leadership, expressing concern about the need to invest more in shipbuilding. While the changes could lead to the construction of two ships not previously in the budget, they have not actually increased the number of ships the Navy plans to buy in FY-03. That number still stands at five, unchanged from a proposal the Navy offered the Office of the Secretary of Defense last October.

The absence of shipbuilding work directly associated with the Navy's plans to buy only two DDG-51s annually has been a cause of serious concern in the industry and on Capitol Hill. Shipbuilding proponents see a need for the Navy to build at least three surface combatants per year to support the industrial base and maintain the size of the fleet.

"Are you going to be able to do the next Afghanistan with a 150 ship Navy? Yet, the Navy, which was one of the leading players in Afghanistan, if not the leading player, is sacrificing their whole future by not properly funding the shipbuilding budget," said the source.

Recent analysis done for Congress by the Navy, with help from the General Accounting Office, argues "the most certain method" of stabilizing the workload at Bath and Ingalls involves having the yards build more of the same kinds of vessels currently in production: DDG-51s at Bath and Ingalls, LPD-17 amphibious dock ships at Bath and LHD amphibious assault ships at Ingalls (see related article).

Some on Capitol Hill are likely to want to look closely at any change that takes money away from LPD-17. The troubled program is no stranger to cost overruns, but they have reached the point now that Pentagon acquisition chief Pete Aldridge is required to submit a selected acquisition report to Congress with the upcoming FY-03 defense budget detailing the cost of the program, Inside the Navy recently reported. A letter from Aldridge is expected to follow within 30 days, saying the ships are essential to national security, not replaceable, under control from a cost standpoint and well managed (ITN, Jan. 14, p1). That certification letter is required because the program has experienced a Nunn-McCurdy unit-cost breach, as it is at least 25 percent over budget in FY-02, sources said.

Two weeks ago at the Surface Navy Association's annual conference in Arlington, VA, the Navy's director of expeditionary requirements, Maj. Gen. William Whitlow, stressed the importance of the LPD-17 program, which will replace several kinds of aging ships, including LPD-4s. Maintaining a stable funding stream for the program is very important, he said.

Officials at the same conference also discussed the "analysis of alternatives" the service has been pursuing to find a replacement for LHA ships. The officially undefined replacement is known as LHA(R). Officials have been considering three choices: a traditional LHD, a modified LHD increased in size with the insertion of a "plug," and a brand new "clean sheet design" ship. The new design is considered the most expensive option. Officials said the analysis is ongoing and no choice has been made. -- Christopher J. Castelli