Americas Defense Meltdown - IT Acquisition Advisory Council

202 • Long in Coming, the Acquisition Train Wreck is Hereprojections. In testimony before the House Seapower subcommittee in March 2008,CRS analyst Ron O’Rourke stated that the combined cost growth for the plannedseven DDG-1000s would be close to $12 billion in then-year dollars, which is roughlycomparable to the total amount of recent annual funding in the Shipbuilding andConversion, Navy (SCN) appropriation account.These cost projections, along with recent reports that the ships aren’t large enoughor can’t be configured to incorporate missile defense radars, have completely underminedsupport for the program. The House of Representatives, in its FY 2009 DefenseAuthorization, voted for a pause in DDG-1000 construction, citing the cost of thefirst two ships and their dependence on yet unproven technologies. This action wasfollowed in late July 2008 by a Pentagon decision to terminate the program followingthe two ships currently under construction. The Navy will ask Congress to drop therequest for the third ship in the 2009 defense budget and, instead, it will build moreDDG-51s, a course of action long resisted by the Navy prior to this decision, andforego plans to build the remaining four ships.Not only was the DDG-1000 program fraught with cost and schedule problems,but the Littoral Combat Ship (LCS) also ran into serious problems. Out of the firstfour prototype ships, the two now in construction are well behind schedule and overcost, and the other two have been terminated outright, calling into question the Navy’splanned buy of 55 LCSs. The Navy had originally estimated these first two lead shipswould cost in the neighborhood of $500 million each with subsequent ships comingdown in cost to $220 million. The CBO has estimated these first two LCSs couldend up costing about $700 million each, including outfitting and post-delivery andvarious nonrecurring costs associated with the first ships of a class, but excludingmission modules. Furthermore, at the Navy’s request, the FY 2008 National DefenseAuthorization Act lifted the cap for the fifth and sixth LCSs from $220 million to $460million. But even that may not be enough, as the Navy has stated in a February 2008report to the Congress on its new LCS acquisition strategy that it may be unable tostay within the new $460 million cap set for future LCS hulls.Yet another example of “head in the sand” management on the part of the Navy isthe VH-71 Presidential Helicopter program. The program, approved by the DefenseAcquisition Board (DAB) in early 2005, envisioned a two-phased development andprocurement strategy. Increment One would provide a “reduced capability” system inthe near term with seven test articles and five production aircraft funded. IncrementTwo was scheduled to provide two test articles and 23 modified production aircraftequipped with the complete communications and survivability package. After encounteringskyrocketing costs and significant engineering problems, many of which hadbeen predicted by some participants in the 2005 DAB, the Pentagon put the programon hold in 2007 and undertook a series of internal reviews and discussions withWhite House officials about the future of the program. During that time, a Pentagon