Bath Iron Works To Take Delivery of First Set of DDG-1000 Equipment

Defense Daily, Sept 26, 2007

By Geoff Fein

The Navy yesterday said it was sending the first delivery of mission system equipment (MSE) for DDG-1000 to General Dynamics' [GD] Bath Iron Works (BIW) to align ship construction schedules to support the surface combatant industrial base and to manage the Navy's ship construction workload.

Northrop Grumman [NOC] Ship Systems (NGSS) will now receive the second set of equipment, under the dual-lead ship strategy.

BAE SYSTEMS and Raytheon [RTN] are both supplying the majority of MSE. The systems will be provided as Government Furnished Equipment (GFE) to both shipyards.

MSE includes radars, the advanced gun system, undersea warfare systems, exterior communications and the total ship computing infrastructure.

In no way should the decision to shift MSE to Bath be seen as a mark against Northrop Grumman Ship Systems, said Lt. Cmdr. John Schofield, a Navy spokesman.

"The decision was reached after reviewing the current and future workload projections at each shipyard and soliciting input from both shipyards. The Navy concluded that resequencing the delivery of the first ship set of MSE to BIW best addresses the current workload at both yards and better balances the surface combatant industrial base," he said. "This decision was absolutely not a punitive action against NGSS. The Navy was extremely pleased with the level of participation from both shipyards in reaching this decision. In addition, the Navy is also pleased with the unprecedented level of participation and cooperation during ongoing DDG-1000 detail design efforts."

Rumors regarding a plan to change the delivery schedule of the first order of GFE equipment to Bath came earlier this summer, after Navy Secretary Donald Winter sent a strongly worded letter to Ronald Sugar, Northrop Grumman's CEO (Defense Daily, July 18).

In his letter to Sugar, Winter said the "persistent shortcomings at the NGSS yards are troubling and causing me not only grave concern about the LPD program, but also the LHA and DDG-1000 programs" (Defense Daily, July 5).

Winter's letter focused primarily on the work being done on the San Antonio-class of amphibious ships.

"The Navy does not want to find itself in the same situation it faces with LPD-17 & 18," Winter said in the June 22 letter. "It is imperative that NGSS deliver future ships devoid of significant quality problems and that it meet its cost and schedule obligations."

On June 29, Sugar responded to Winter, stating that he has the same expectation as Winter does for future LHA and DDG-1000-class ships.

"That is our expectation and that is our commitment to the Navy. We will invest, train and manage our operations to that end," Sugar said. "Irrespective of Hurricane Katrina, Northrop has much work to do to meet the needs of the U.S. Navy."

Northrop Grumman's Ingalls shipyard in Pascagoula, Miss., suffered extensive damage from the August 2005 hurricane.

In March of this year, workers at Ingalls went on strike for almost 30 days, after the union representing nearly 7,000 workers and the company failed to reach an agreement on a new contract (Defense Daily, March 9).

Construction contracts for DDG-1000 and DDG-1001 are currently being negotiated with both shipbuilders, Schofield said.

He added that the new delivery sequence could have a positive impact on the cost of the first two ships, although it is too early to tell.

"It is anticipated that this decision will have a favorable impact on the total cost of the lead ships, but it is premature to speculate, given that contract negotiations are ongoing. The delivery dates of the first two ships are also subject to contract negotiations, but delivery of both lead ships is still expected to be in the 2013 time frame," he said.

Construction contracts are anticipated to be awarded by the end of the calendar year, and fabrication at the two shipyards is planned to begin in FY '08, Schofield noted.

The long-term acquisition strategy for the FY '09 and out ships is under review within the Navy, Schofield said.

"It will be the subject of an OSD (Office of the Secretary of Defense) Defense Acquisition Board program review in the fall 2007," he added.

The Navy has been given the green light to build seven of the next- generation combat ships.

[Copyright 2006 Access Intelligence, LLC. All rights reserved.]

TICKER(S): General Dynamics' [GD]: Northrop Grumman [NOC]: Raytheon [RTN]: