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Navy Briefing on DD(X) Downselect Decision

Presenters: Assistant Secretary of the Navy John Young, Jr.
April 29, 2002 5:00 PM EDT

(Special Defense Department briefing on the Navy's downselect decision for the lead design agent for the DD(X) Ship Program with John Young, Jr., assistant secretary of the Navy for research, development and acquisition. Also participating were Rear Adm. Charles Hamilton, DD(X) program executive officer, and Rear Adm. Philip Balisle, director, surface warfare division. DD(X) Ship Program slides available at http://www.defenselink.mil/news/Apr2002/g020429-D-6570C.html.)

Staff: Thank you. I appreciate your patience in getting started.

In a moment here, Assistant Secretary of the Navy for Research, Development and Acquisition John Young will take the podium here, accompanied by the DD(X) Program executive officer, Rear Admiral Charlie Hamilton. And from the Navy staff -- although the Navy staff is not part of the acquisition decision cycle today, will be a flex point in the acquisition process -- Admiral Balisle from the Navy staff, who sets the requirements for the surface combatants of the future, will also be available after Mr. Young's remarks if you have questions for him.

So, Mr. Young.

Young: Thank you all for taking the time to be with us today. It's an important event for the Navy, particularly for the future of the Navy. And I'm going to take just a minute and read -- basically read you a statement that's been prepared to get the message out.

I'm here to announce, as you know, the award of the DD(X) design agent contract. This contract includes the design, building and test of engineering development models for the major transformational systems, such as the integrated power system, the advance vertical launch system, and the integrated radar suite. Both the Blue Team -- which was Bath Iron Works and Lockheed -- and the Gold Team -- Ingalls Ship Systems and Raytheon -- teams submitted superb proposals. Both teams should be extremely proud of their efforts. It was a very difficult choice for the Navy Source Selection Team.

The award will be made to Ingalls Shipbuilding, Incorporated, the Gold Team lead. Their proposal was selected due to its overall management and technical approach, coupled with superior engineering development models and exceptional specified performance features of the proposed design. The superior EDMs and features included an innovative peripheral vertical launch system, dual-band radar suite, two-helicopter spot flight deck, and stern boat-launching system.

The contract was competitively awarded based on best value. The government's evaluation considered their management approach, their technical approach, and past performance and cost. Best-value determination involved an assessment of the greatest technical value to the government at a reasonable cost.

The source selection process was the first of a kind for a Navy shipbuilding program and will be the model for future Navy acquisitions, the openness of the source selection process, and included two meetings with the competing teams to conduct oral discussions, and they were provided the government's evaluation of their initial proposals and response to discussion questions prior to submittal of their final proposal revisions. This was very similar to the process conducted in the Joint Strike Fighter award.

The contract value is approximately $2.9 billion, with a period of performance through fiscal year 2005.

BIW will continue to be involved in the design of the ship and development of the EDMs, to ensure that both shipbuilders can product DD(X) and can compete for the detailed design and construction of the lead ship in fiscal year 2005.

In addition, the Gold Team proposed a national team for combat systems, to ensure the best industry-wide solutions will be incorporated in DD(X). The national team proposed by the Gold Team includes Northrop Grumman Ship Systems, Raytheon, Lockheed Martin, and Boeing.

The award of the DD(X) design agent contract signals the start of a revolution for the Navy's surface combatant fleet, with the development of transformational technologies that will create new capabilities while reducing crew size. DD(X) is the foundation for a family surface combatants, including the future cruiser CG(X) and the littoral combat ship, or LCS.

The lead ship of the DD(X) class, to be built under contract in FY 2005, will be an active member of the fleet once it completes its shakedown trials and follow-on testing.

At this point, we'll be happy to take any questions you might have. Yes, ma'am?

Q: How many of these vessels does this contract cover?

Young: This -- the contract we're awarding today is for the design agent on the contract. So there are no options for ships in this contract. It's solely to build the engineering development models and perform the design of the ship. In FY 2005, we expect to have a second competition or the next-step competition to award detailed design and final construction of the lead ship.


Q: How will be BIW continue to be involved?

Young: The proposals -- one criteria in the source selection was how you involve the second shipbuilder. So the intent is that both design teams -- and I can let Admiral Hamilton add to this -- come together as a single team, if you will, almost, and particulate in the design of the ship, so that both yards are prepared, as I said, to build the ship when it comes time to have the competition in 2005.

Q: So then what is the advantage to being the lead designer?

Young: I think the -- there are a couple of key advantages: one, the Navy -- one of the source-selection criteria, as I mentioned, was specified performance. The lead designer proposed a ship design which had some extremely strong features, in the view of the Navy. And that's probably what tipped the scale, although again, I want to restate that both proposals were exceptional. Both companies -- or both teams did an excellent job of responding to the Navy's concerns. But the advantage to the Navy is the lead designer has produced a ship design that we believe will meet the Navy's needs into the future and is a powerful tool for the surface fleet. The lead designer will, by definition, probably have, hopefully next to the Navy, the lead seat at the table in making decisions about the design and other pieces of work. But it will continue to be an evaluation criteria of their performance as to how they involve the second shipyard and how both yards are prepared to go forward and build the ship.

Yes, sir.

Q: Yeah. What Northrop had discussed -- Phil Durer (sp) had outlined was that for this, assuming the gold team won, they would take I guess a Spruance-class or an existing destroyer, strip it out and install all the new technologies and new systems and prove that it worked. Is that still the plan?

Young: That is -- I always have to look and see if we can talk about some of these things. That's our understanding of the plan.

Hamilton: Several of the 11 (engine?)-development models that are part of the phase-three activity FY '02 to FY '05 by goal will be installed on a ship. One of the 963s has been proposed, and they will do risk mitigation on that ship with some of those but not all of those EDMs.

Q: Okay, so this will be a test bed that will show that all these systems -- you put 'em together, and they do work.

Young: I think it will be a test bed for demonstrating the systems. It's not required that all the systems be totally integrating in being on that test bed, but this will be a useful and appropriately scaled, if you will, test bad for seeing each of the individual systems and possibly some degree of integration if cost and schedule permit.

Q: Okay. Could you also tell us a little bit about the work sharing as far as the shipyards -- Northrop, General Dynamics -- and the sharing that would occur between the systems people -- Raytheon, Lockheed -- how that would work?

Young: Well, again, as I mentioned, part of the Gold Team proposal is to form a national team, particularly with regard to combat systems. I think I mentioned that that would include Northrop Grumman Ship Systems, Raytheon, Lockheed Martin and Boeing. At this time, how the definitize those agreement we need to observe on behalf of the Navy, but I think it is important to capture some of the ideas that were put forward by all those participants for combat systems.

Yes, sir.

Q: Is it fair to say -- hi, sir.

Young: How you doing?

Q: Is it fair to say Ingalls has an edge in terms of winning the production of the first full-scale destroyer?

Young: I'm not prepared to say that. I think again, if we conduct the design agent process effectively and in accordance with what the Navy believes needs to be done, both companies will be prepared to be level-playing-field, equal competitors for the FY '05 lead ship.

Q: Can you (bound?) the DD(X) program at this point? Is it for 32 ships? Is there an acquisition cost right now? Your latest SAR has got 10 billion for research. And will there be separate competitions for the cruiser design and for the littoral combat ship design, or does Ingalls now have a lock on those two other ships?

Young: Well, let me take those in order. I've been looking forward to introduce to you one of the most competent admirals in the Navy, Admiral Phil Balisle.

Balisle: (laughs)

Young: And he can talk to the numbers issue, and then I'll let Admiral Hamilton talk to you about how we look -- we are looking downstream to CG(X).

Balisle: Thank you, sir. With respect to the number of ships, as the secretary mentioned, what we're trying to do here clearly is to set out and build a family of ships. That family of new combatants for the 21st century will integrate with our present force of Aegis combatants to give us the right balance of ships. At the same time, we're building the DD(X) family of ships in a spiral development way so that we can bring new technologies, because this is a leading technology development, into the ship class as those technologies mature.

As a result of that, and because we're developing some concepts to go with this kind of ship family, we have not definitized a particular number of each variant of the ships. Better to say that we will build the multi-mission combatant and spiral in capabilities from the destroyer to the cruiser as those capabilities mature.

With the case of LCS, that ship will be a focused-mission ship, not a multi-mission ship, that is designed to work in a netted force of combatants and to complement and leverage the multi-mission ships in that family. Again, the number of LCS ships that we will build in the future will be driven by the total balanced force and concepts that they work under, and those numbers are still under review at this time.

Q: So we should not use 32 like the DD-21 program envisioned for the destroyers?

Balisle: Not for a particular level of development of the destroyers. It's what the family will contribute over time that will really drive the force structure, and that family will be the destroyer as it evolves to the cruiser, not a particular flight or variant of the ship as it moves along that evolutionary path.

Q: Well, I have to ask then, what kind of acquisition plan is this if you don't even know how many destroyers you plan to buy in the out years, given all the concerns about bow waves in this building? I mean, how do you get your hands around that if you don't know how many you're going to build eventually?

Balisle: You want to, or you want me to answer?

Hamilton: You first.

Balisle: With respect to the number of ships, it's very important to realize that in this family of ships, DD(X) and CG(X), we're talking about a ship class that is a common-hull, common- propulsion foundation. Consequently, how you evolve the combat systems to reside on that foundation, you have a lot of flexibility. So when you talk about what set of combat systems will be on that ship at any point in time, it becomes somewhat arbitrary. As a result, since we have not defined clearly the number all the way through CG(X), it's just premature to give you a number of any particular variant.

What we do know is that eventually, the DD(X) family of ships will be the replacement for the Aegis multi-mission ships that we have today. So as we phase those ships out, we'll be introducing new variants to the DD(X) family.

Q: And then the question of design, the competition.

Hamilton: We know in the FY '02 to FY '05 timeframe, the engineering development model risk mitigation we're conducting will naturally lead into those classes of ships as we go forward. So we feel that we're doing risk mitigation not only for DD(X) but also CG(X) and LCS. And our expectation would be that a separate competition would be conducted for both the cruiser and the littoral combat ship.

Q: Sir, will one of the DD(X) variants be able to support the 155 gun? Was that -- how did that figure into the decision?

Hamilton: Within the requirements documentation that supported the request for proposal for DD(X), 155 advanced gun system was part of the bid and in fact is one of the EDMs that is being risk- mitigated in this next three-year period.

Q: If you do a separate competition for the design of the other ships, don't you lose, in effect, some of your advantage by -- of a family? I mean, I thought the idea here was that by having a family of ships, one flows from the others, or -- and -- or the other flow from one -- excuse me -- and you save some money. Sounds like you're going to go back to square one.

Young: I think -- you guys can add to that. I think at that point in time we will have an open competition. The Navy will own the design.

But the Navy is making a choice in this process to have two yards be the lead yards for surface combatants. So the DD(X) hull will be the base from which they propose the design changes necessary to evolve this to CG(X). That could include various things from lengthening the hull and changing the size, but it will be, to our view, likely the basic hull form shape, appropriately sized and with the proper features added to accommodate the CG(X) mission, as defined in the requirements by Admiral Balisle's team. So I don't think we'll lose that. One of these two yards will build CG(X), I think, in almost every likelihood. But we do need to give both yards a chance to again reinvigorate their design teams and propose to us, just as they've done a great job on DD(X), their best ideas of how to get to CG(X) leveraging this hull and the developments we'll accomplish on the combat system.

Q: And on DD(X), are we still talking about a lead ship with a crew of 95, powered by electric drive? Are those features still part of this lead ship?

Young: That's powered electric drive.

The crew size -- some of the features -- getting back to Tony's question, you know, as you all well know, as we move to DD(X), part of the acquisition strategy is to review the requirements. That requirements review process is under way. It's included in this award to essentially have a trade study space on making some final adjustments in the size and capabilities of DD(X), so we have the design just right. And we have, as introduced, I think, to some extent, by Admiral Pietropaoli and through Secretary Aldridge's comments, a spiral process, where we have an initial goal for the crew size, with -- that's higher. It's more like --

Hamilton: One-twenty-five.

Young: -- 125. And then we would like, through the spirals, to gradually, through automation, the computing environment and other features, bring that crew size down to the objective goal, which eventually does get as low as your number, I think.

Voice: Yes, sir.

Q: So it's 95?

Young: Yeah. Is that what's --

Q: Sir?

Young: Yes.

Q: The systems integrators -- at least the competition between them is often described as somewhat of a winner-take-all, with not a lot of shared work. Could you at all talk about the role that Lockheed might still play, whether it'd be a major role and how the national team might - --

Young: I think the gold team would be best able to answer that. You know, it wasn't a -- it was a proposed feature of their proposal, if you will, but it wasn't a driving consideration. They believe it is important to involve Lockheed and Boeing in some of the Raytheon -- I mean, some of the blue team participants in their design. They need to go out and conduct those negotiations under the watchful eye of the Navy, if you will, to make sure we all do exactly what we started with. And that is, try to get the absolute best hull, which I think we've done, and then get the absolute best combat system for DD(X).

Q: Could you go back to size a little bit? You said in the past that it wouldn't be the same size as what the D-21 was. So can you tell us a little bit about what the size --

Young: (inaudible) -- as far as to say there's a pretty good chance that's the only thing we can say with confidence. It won't be exactly the size DD-21 was. But what it is, I don't know until Admiral Balisle completes his requirements process, and I'd welcome if he wants to comment about it. We're trying -- we have the right hull form. This hull form has some scalability up and down in the size range. And so we need to determine exactly what the war-fighter needs, in terms of firepower and other systems and then let that drive the hull.

I think it's -- the only thing I've said, and I've said so publicly, is I think we had a lot of requirements on DD-21. We're reviewing whether we had too many, just the right amount or whatnot. And then out of that requirements process will flow essentially the sizing and equipage of DD(X). And out of that, too, will flow a price. I mean, as long as we all understand that we are going to have to properly budget in accordance with, I think, Secretary Aldridge's goals, and I strongly support that. We're going to probably need to fund the program to a realistic cost estimate run through the Cost Analysis Improvement Group, and the Navy's well prepared to do that, once we have the requirements right and the hull form down.

Balisle: I'll only add that we do think it's very important that the war-fighting requirement for the force be fully met, because that requirement's very real. But as the secretary said, there is a trade space here when you start to take into account the full family of ships, what CG(X) will bring to the family, what LCS will bring to the family. We have the opportunity, then, to work within that trade space to get the ship size to the best possible level, to bring that war-fighting capability mix and affordability to it.

If I may add just one thing to ensure there was no confusion with a previous question, while DD(X) and CG(X) will leverage that hull form and the things the secretary spoke about, LCS is a different ship. It's very much part of the family. And in the operational context, it's being designed and conceived very much to be part of the same netted force to give that type of synergistic force multiplier capability to the multi-mission ship. But that doesn't mean it would be the same hull, the same shape, same size or anything like that. In fact, just the opposite. We see it being a ship that would be very different in that sense, yet a very important part of the operational family and a ship that could share some of the technologies that's occurring in the DD(X) line at the same time.

Q: You mentioned the helicopter pads and dual beds. Can you tell me a little bit more about what were the major differences between the Northrop bed and the General Dynamics bed, and which one most led you to Northrop?

Young: I can talk about the Northrop design and some of the features that made it an extremely strong candidate, and that's probably where we can go right now. As you know, we're working aggressively to debrief the Blue Team. We'll debrief both teams and let them understand the strengths and weaknesses. And so until that's accomplished, we really want to talk about the design we picked.

The design selected offers a couple things, as I mentioned. Maybe you could see on the board here, there's a capability to stern- launch, if you will, through aft, ribs-class boats, special operations type boats. The other feature you see cleanly, the two helo spots on the aft section of the ship. I guess, thinking about how to talk about this, another strong feature is this peripheral vertical launch system that you see here. Basically it means that the VLS cells will be installed in blocks of four, if you will, along the side of the ship, and it will be designed in such a way such that if the ship was damaged by a round and there was even sympathetic detonation, the blast would try to come out away from the hull. This is a damage- mitigating factor for the ship. It also voids the risk of having a single round go into a magazine of, say, 48, 64 VLS cells and you lose all the missiles at one time. Here you'd potentially lose four or eight missiles, depending on where a round came in. The radar has some features, it's integrated at the wave-form level. That offers some very positive benefits for the long-term in terms of countermeasures against radars and threat jamming.

Those are -- those would be the key features I'd highlight to you.

Admiral Hamilton, let me see if he wants to add some more comments to what weighed heavily in our minds on Gold.

Hamilton: The Gold design provided some unique flexibilities in terms of boat operation and remote sensor operation through a stern-launch ramp for boats, Special Operations forces craft; remote sensors like Long-Term Mine Reconnaissance System, and a safety feature there with fewer crew handling boats as part of natural underway process.

The automation that went with total-ship computing environment drove crew size down very nicely in the direction that we've been hoping for across the flights. They did very well at sustaining 30 knots sustained speed. And their double -- hybrid double hull provides many of the damage-control features that we were looking for in terms of ship survivability.

We liked very much the integrated undersea warfare and in-stride mine-avoidance features with both the dual-frequency sonar bow array, multi-function tote array and torpedo and countermeasures. Those are some other features that we found attractive.

Q: Admiral Hamilton, can I -- on survivability, Ingalls obviously repaired the Cole. Did that repair job give them any in -- any kind of advantage on the proposal they eventually submitted to you in terms of survivability enhancements?

Hamilton: I would say that both team clearly understood the nature of survivability challenges of 21st century weapons and how those impact in hull form design and strength and structure. So we found the Gold design to be very satisfactory in that regard.

Q: Just along that line, can you quantify for us how much more survivable this ship might be than a DDG-51? Would it be 50 percent more survivable? Ten percent more survivable? Can you put a number roughly to that?

Hamilton: I don't believe I could put a number to that right this minute. As the design matures over the next several years, perhaps we'll gain some insight into that value. And as we understand that and gain that understanding, we'll share it as best we can.

Young: Couple more. Go ahead, Chris.

Q: As you look ahead, what are some of the deadlines per se to finishing the requirements review or beginning competitions for CG(X) and LCS?

Balisle: We have a design-review process that's been ongoing for the last few months to look at the family of ships, with the first focus being on DD(X). Our near-term objective is to take the DD-21 Operational Requirement Document and to revalidate and refind that ORD to reflect DD(X) in its present form and as we see it meeting our requirement.

We will also, from that design review, then move to write and ORD for CG(X). That document does not have to be in place for a couple of years, because that particular variant of the family is still a little ways out in the future. And we will also, from that process, gain some insight that we will use for the LCS ORD, which we will be working on within the next year or two, two years, to bring to a final state as well.

Q: Do you have a ballpark time when you might finish the review of the requirements for the destroyer?

Balisle: Yes. For DD(X), we hope to have that ORD revalidated by the end of this year.

Q: Fiscal year or calendar year?

Balisle: I would like to say by the calendar year, to buy me three additional months, if you -- but certainly by the end of the calendar year, we would hope that we would have that ORD revalidated. And our objective is to do it as soon as we practically can.

Q: Mr. Young, was this a close competition? I'm looking back to the Joint Strike Fighter competition, when Air Force Secretary Roche said, "This wasn't close; we knew fairly early on that Lockheed was the winner." Was -- how close was this competition?

Young: I meant what I said. They submitted superb proposals. Admiral Hamilton's team engaged them and told them what we were concerned about. They in most cases addressed that, addressed it effectively. It made the proposals excellent to the Navy, and it really gave the Navy the basis, if you will -- i.e., all the information necessary -- to try make a good decision. That good decision was hard to make, but I think it's -- an important comment I'd make to you is that that process -- and Secretary Aldridge made this comment, but it means more than the comment sounds like it means. He said the program and its spiral development approach will be the model for Navy acquisition in the years to come.

Programs have -- these early days make some significant decisions about the path of the program, in terms of our ability to deliver it, what it will cost, and other such features. Working hard with the companies now to avoid any misunderstanding about what they're proposing and what the Navy wants sets a very good stage.

And as you know, right Joint Strike Fighter is -- I'm currently the acquisition executive for that. I think this program follows exactly where JSF is. We have set a very good stage for the company to understand what we want and what they need to do to deliver it, and so we have opened the door for success in this program. And it's really important, though it makes the source selection decision tougher, to have that interchange and be as clear as possible about what the program baseline is and exactly what you feel the company needs to do to address our requirements and be successful in delivering the system within the cost and schedule.

Q: It sounds like this was a close decision, though.

Young: It was very close.

Q: Who was the ultimate decision maker? Was it you?

Young: I'm the source selection authority for the DD(X) program. And there's a source-selection evaluation board and a source selection advisory committee.

(Right here?).

Q: One quick one, just -- I want to make sure that the numbers I have are still right. And it might not be. I understood that the winner would soon get 350 million in fiscal 2002 funds. Is that still right? And apparently the Bush administration's requested 961 million for fiscal 2003 for this project. So are those numbers still right?

Hamilton: The Phase III award this month is for $74 million in FY '02.

Q: (off mike)

Hamilton: Two-hundred and seventy-four million in fiscal '02 and thus the successful offer, if you take the Phase II activity, 29.5 million per came in phase II in FY '02 plus the 274 I just mentioned gets you a total in fiscal '02 of 303.5 million. The fiscal '03 request currently on the Hill -- 961 million.

Young: And that is -- the one thing I'd do is, I'd give credit to Admiral Balisle's team. We've worked very hard to shape how we will address the requirements through this new strategy. And Admiral Hamilton's team has just done an exceptional job. We're exactly where we promised the Congress and OSC and everyone we would be. We're selecting by April our request for '03. That 961 was build on that basis, so it will be critical for us to get the news of this decision out and then go let people know we are prepared and need the 961 to be able to execute the program that we've laid in place.

Q: Can we do one more?

Young: I'm going to let this guy --

Staff: Okay, this is really the last one.

Q: Okay. Each of you today has used the term "family of ships" repeatedly. For some time this winter, senior leadership of the Department -- the comptroller and I believe the deputy secretary, perhaps the secretary -- referred to DD(X) as a "test bed." Can we now assume that everybody's on the same page here -- that this really is a family of ships and not just a one-time deal?

Young: That's never been a question in my mind. The only question I think in some people's minds is then whether DD(X), the first one was a test ship. It's not. I want to be clear with you. We will build that ship to be, as I said in my opening statement, a fleet asset. Will we have to make some modifications once we deliver the first ship and conduct some initial tests? Will we back-fit certain items? Yes. We do that on DD(G)s in some cases today. But on day one or year one or year two, or as soon as possible, the first DD(X) built with RDT&E funds will be the lead ship of the class and will be a deployed operational asset for the fleet.

The requirements that define that ship will be driven by all the comments that Admiral Balisle made. We will have a family of ships and we will look to balance requirements across what LCS can do for us and at what cost, what DD(X) can do for us, and what cost in CG(X). And we will have to have each member of that family for the Navy -- and Admiral Balisle is the right guy to comment about this, but I believe for the Navy to be effective in the surface in the future, we need that family of ships.

So there will be a class of DD(X)s. The requirements will define exactly how many there are. There will be a class of LCS, I believe, and there will definitely be a class of CG(X) to address our air defense and missile defense requirement.

Q So you're saying basically that what CNO Clark said to Congress, "You give us the money, DD(X), we will build the ships, not just this initial ship, but we will build a class of ships."

Young: CNO couldn't be more right.


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