The Pentagon is taking a hard look at whether the Navy should buy a 10th Arleigh Burke-class (DDG-51) destroyer under a multi-year procurement given the impact sequestration is having on the shipbuilding budget, Defense Secretary Chuck Hagel said Tuesday.
“We are currently closely examining whether a commitment to that 10th ship should be made,” Hagel told the Senate’s defense appropriations subcommittee.
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| The USS Michael Murphy (DDG-112) during acceptance trials last year. Photo by General Dynamics. |
The Navy has said that because of the automatic budget cuts that kicked in March 1, it is about $300 million short of being able to exercise a contract option for the DDG-51. That 10th vessel would be procured in fiscal 2014 and would be the second for that year.
Hagel said the Navy’s fleet of destroyers is critical to implementing the Pentagon’s shift to the Asia-Pacific region. He said, however, the decision on whether to exercise a contract option for the 10th ship “has not been made.”
The topic arose under questioning from Sen. Susan Collins (R-Maine). Her state is home to General Dynamics [GD] Bath Iron Works, where the 10th ship would be built. Pentagon budget chief Robert Hale told Collins the Pentagon is working with Congress to acquire the funding through a reprogramming request currently before lawmakers.
“We’re going to have to look at this in light of what happens in overall sequestration before we make that final decision. But, we’d like the 10th ship,” Hale said.
The Navy on June 3 awarded two contracts for nine DDG-51s at a combined value of $6.1 billion. Huntington Ingalls Industries [HII] was awarded five of the ships while Bath Iron Works received four with an option for a fifth. The contracts cover the cost of constructing the hulls. Once the Navy adds weapons, sensors and other systems the cost of each ship exceeds $1 billion.
Naval Sea Systems Command (NAVSEA) structured the award by allowing the shipbuilder with the lowest bid to receive higher profit margins as well as the guaranteed fifth ship, which in this case was Huntington Ingalls Industries.