November 23, 2005

New DD(X) destroyer sails ahead

By Jim Wolf

WASHINGTON (Reuters) - The Pentagon will order an initial
eight highly-automated DD(X) destroyers being developed by
Northrop Grumman Corp. and General Dynamics as the centerpiece
of the U.S. Navy's 21st century fleet, a defense official said
on Wednesday.

Ending speculation the ship might be killed, the Defense
Department cleared a plan to let both Los Angeles-based
Northrop and General Dynamics, Falls Church, Virginia, each go
ahead with detailed design work, the Pentagon said.

The chief U.S. weapons buyer, Kenneth Krieg, also approved
"low rate initial production" of eight ships after a meeting on
Tuesday of the Defense Acquisition Board, which considers major
weapons systems, said the defense official who asked not to be
named because he was not authorized to speak about the matter.

He estimated the value of the eight ships at $20 billion.

The DD(X) will have substantially lower radar and acoustic
"signatures" -- making it harder for an enemy to find and hit
-- and be highly automated to cut crew size by more than half
compared with current destroyer levels.

It will incorporate new technologies that also would be
used in a new aircraft carrier and a new cruiser. The Navy
hopes the first DD(X) will be delivered in 2012.

Cheryl Irwin, a Pentagon spokeswoman, confirmed that Krieg
had cleared the program to enter a big-money phase known as
"system development and demonstration." But she said she had no
information on the number of ships to be built.

No construction contracts would be awarded until a further
session of the acquisition board, the defense official said,
citing a memorandum from Krieg that was not made public.


Navy officials said Krieg had cleared a Navy request to
start the acquisition program with a "dual lead ship" strategy
using fiscal 2007 funds.

According to this Northrop and General Dynamics each will
build a ship of its own to meet requirements set by the
Pentagon and the Navy, Navy spokesman Lt. John Gay said. On
completion, the Navy will recommend whether to continue
splitting the construction or go with one of the two yards.

Such a decision may be made in 2008 or 2009, said the
defense official. Each of the two initial ships to be built --
one by each yard -- is projected to cost $3.3 billion. The Navy
hopes to drive down the price of future ships to $2.2 billion.

Krieg gave the go-ahead after a "Milestone B" review -- the
decision on whether to let DD(X) advance despite expected
delays or cuts in other big-ticket weapons programs as the
United States copes with war costs, a growing deficit and
hurricane relief, among other headaches.

Key senators had blocked the Navy's earlier-proposed
"winner-take-all" approach to building DD(X), which it said
would cost less, on the ground it likely would knock the losing
company out of the business of building surface warships.

The Pentagon's DD(X) decision "takes us through a critical
threshold," said Randy Belote, a spokesman for Northrop, which
would build its version of the ship at its Pascagoula,
Mississippi, shipyard.

General Dynamics, which would build at its Bath Iron Works
yard in Bath, Maine, had no immediate comment.

Northrop shares fell 16 cents on Wednesday to close at
$56.49 on the New York Stock Exchange. General Dynamics's
shares rose 2 cents to $116.16.