August 8, 2005

Pentagon OKs continued design work on Navy warship

WASHINGTON (Reuters) - The Defense Department has
authorized Northrop Grumman Corp. and General Dynamics Corp. to
continue design work on the new Navy DD(X) destroyer while
Congress and Defense Department officials decide the fate of
the program, a spokeswoman said on Monday.

Pentagon acquisitions chief Kenneth Krieg signed a
memorandum late on Friday authorizing the Navy to continue
giving the two companies contracts for preliminary design work
on the ships, said spokeswoman Cheryl Irwin.

She noted that detailed design work would begin after a
so-called "Milestone B" decision that would move the new
program into the new phase of development.

"This just allows the program to continue until the
Department of Defense leadership and Congress decide about the
future of the program," said a Navy spokeswoman.

Analysts for the Congressional Budget Office told U.S.
lawmakers last month the cost of building the first new DD(X)
destroyer could be up to $4.7 billion, above an upper limit of
$4 billion to $4.5 billion set by the Pentagon.

But Krieg told the same hearing that the new ship was
needed to deal with future military threats and would cost less
to operate in the long run than the older DDG destroyers.

Northrop Grumman, with a shipyard in Pascagoula,
Mississippi, had a leading role in designing the DD(X).

The Navy wants to acquire eight to 12 DD(X) ships, with
Northrop and General Dynamics and its shipyard in Bath, Maine,
initially set to split the production work.

Given rising costs, the Navy suggested a competition
between the two shipyards for production work, although that
proposal raised concerns in Congress over whether it would
maintain sufficient U.S. shipyard capacity.