Selected Acquisition Report (SAR)

RCS: DD-A&T(Q&A)823-197

DDG 1000 Zumwalt Class Destroyer (DDG 1000)

As of FY 2017 President's Budget

Defense Acquisition Management

Information Retrieval
(DAMIR)

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Table of Contents

Common Acronyms and Abbreviations for MDAP Programs 3

Program Information 5
Responsible Office 5
References 5
Mission and Description 6
Executive Summary 7
Threshold Breaches 10
Schedule 11
Performance 13
Track to Budget 15
Cost and Funding 17
Low Rate Initial Production 27
Foreign Military Sales 28
Nuclear Costs 28
Unit Cost 29
Cost Variance 32
Contracts 35
Deliveries and Expenditures 41
Operating and Support Cost 42

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Common Acronyms and Abbreviations for MDAP Programs

Acq O&M - Acquisition-Related Operations and Maintenance

ACAT - Acquisition Category
ADM - Acquisition Decision Memorandum
APB - Acquisition Program Baseline
APPN - Appropriation
APUC - Average Procurement Unit Cost
$B - Billions of Dollars
BA - Budget Authority/Budget Activity
Blk - Block
BY - Base Year
CAPE - Cost Assessment and Program Evaluation
CARD - Cost Analysis Requirements Description
CDD - Capability Development Document
CLIN - Contract Line Item Number
CPD - Capability Production Document
CY - Calendar Year
DAB - Defense Acquisition Board
DAE - Defense Acquisition Executive
DAMIR - Defense Acquisition Management Information Retrieval
DoD - Department of Defense
DSN - Defense Switched Network
EMD - Engineering and Manufacturing Development
EVM - Earned Value Management
FOC - Full Operational Capability
FMS - Foreign Military Sales
FRP - Full Rate Production
FY - Fiscal Year
FYDP - Future Years Defense Program
ICE - Independent Cost Estimate
IOC - Initial Operational Capability
Inc - Increment
JROC - Joint Requirements Oversight Council
$K - Thousands of Dollars
KPP - Key Performance Parameter
LRIP - Low Rate Initial Production
$M - Millions of Dollars
MDA - Milestone Decision Authority
MDAP - Major Defense Acquisition Program
MILCON - Military Construction
N/A - Not Applicable
O&M - Operations and Maintenance
ORD - Operational Requirements Document
OSD - Office of the Secretary of Defense
O&S - Operating and Support
PAUC - Program Acquisition Unit Cost

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PB - President’s Budget
PE - Program Element
PEO - Program Executive Officer
PM - Program Manager
POE - Program Office Estimate
RDT&E - Research, Development, Test, and Evaluation
SAR - Selected Acquisition Report
SCP - Service Cost Position
TBD - To Be Determined
TY - Then Year
UCR - Unit Cost Reporting
U.S. - United States
USD(AT&L) - Under Secretary of Defense (Acquisition, Technology and Logistics)

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Program Information

Program Name
DDG 1000 Zumwalt Class Destroyer (DDG 1000)

DoD Component
Navy

Responsible Office

RDML(S) James Downey Phone: 202-781-2902

Program Executive Office Ships (PMS 500) Fax: 202-781-0021
1333 Isaac Hull Ave. S.E. Stop 2202
Washington, DC 20376-2202 DSN Phone: 326-2902
DSN Fax:
Date Assigned: August 6, 2010
james.downey@navy.mil

References

SAR Baseline (Development Estimate)

Defense Acquisition Executive (DAE) Approved Acquisition Program Baseline (APB) dated November 23, 2005

Approved APB
Defense Acquisition Executive (DAE) Approved Acquisition Program Baseline (APB) dated March 25, 2011

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Mission and Description

DDG 1000 Zumwalt Class Destroyer (DDG 1000) will be an optimally-crewed, multi-mission surface combatant designed
to fulfill volume firepower and precision strike requirements. This advanced warship will provide credible forward naval
presence while operating independently or as an integral part of Naval, Joint, or Combined Expeditionary Strike Forces.
Armed with an array of weapons, DDG 1000 will provide offensive, distributed, and precision firepower at long ranges in
support of forces ashore. To ensure effective operations in the littoral, DDG 1000 will incorporate signature reduction, active
and passive self-defense systems, and enhanced survivability features.

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Executive Summary

Program Highlights Since Last Report:

​

General

The Zumwalt program has made significant progress conducting the test, activation, and trials phase of the most
challenging and complex class of ships the Navy has ever constructed. The Navy and the shipbuilder, General Dynamics
Bath Iron Works (BIW) have evaluated yard-wide workload and scheduling for all construction efforts and contracts to
address cost effective ship delivery approaches. The program continues to hold monthly joint BIW and Navy Flag-Level
reviews, working closely to prepare for trials and delivery; and to ensure that lessons learned in the course of building and
testing the first of class are being fully leveraged to improve performance on the follow ships.

Ship Status

The future USS Zumwalt (DDG 1000), the lead ship of the class is completing construction at BIW in Bath, ME. At
approximately 98% complete, the program is heavily focused on the execution of an extensive series of test and trials in
preparation for the Hull, Mechanical and Electrical (HM&E) delivery planned for mid-2016. This systematic approach to test
and trials of ship systems will help identify and correct issues, mitigate risk and ensure a measured, deliberate approach as
the Zumwalt transitions to the fleet. DDG 1000 completed an Alpha Trial December 7-13, 2015.

The stage test program is approximately 84% complete, with Builder’s and Acceptance trials planned to commence in early
2016.

DDG 1001 is approximately 84% complete. Test and activation work is in progress with the Energize High Voltage Power
milestone planned for early 2016. The ship is schedule to be christened mid-2016.

DDG 1002 is approximately 43% complete. Keel laying is planned for quarter one FY 2017. BIW completed design of the
DDG 1002 steel deckhouse which is 22% complete. On December 31, 2015, Raytheon was awarded a contract for
remaining DDG 1002 Mission Systems Equipment (MSE).

There are no significant software-related issues with this program at this time.

History of Significant Developments Since Program Initiation:

January 8, 1995: The program achieved Milestone 0 and started the Cost and Operational Effectiveness Analysis for the
surface combatant for the twenty-first century (SC 21), comprised of destroyers (DD 21) and cruisers (CG 21). The DD 21
was intended to replace the DDG 51 by providing advanced land attack and multi-mission capabilities.

January 1998: The program achieved Milestone I for DD 21 and proceeded into the Program Definition and Risk Reduction
phase. Primary Milestone I risks identified were a ship with a new hull form, several new combat system elements,
significantly reduced manning level, very low signatures, and at lower costs than DDG 51. In order to maintain competitive
cost pressure and to maintain technical competition, the Navy awarded Phase I and II concept development contracts to two
industry teams.

November 13, 2001: The DD 21 program was restructured into the DD(X) program.

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April 2002: Phase II concept development concluded and the Navy competitively selected and awarded a Design and
Development contract to Northrop Grumman (NG) Ship systems (now Huntington Ingalls Shipbuilding – HII). The NG team
was subsequently expanded to a DD(X) “national” team that also included BIW, Lockheed Martin, and Boeing. The NG
concept required RDT&E increases for many of the new technologies including integrated electric drive, radars, software
development, optimized manning, the advanced gun, and munitions. To reduce risk, the Navy contracted for Engineering
Development Models (EDMs) for 10 subsystems.

2005: The 10 EDMs completed testing and reached sufficient technical maturity to support a Critical Design Review (CDR).
At that point, DD(X) was programmed to consist of 10 highly automated, reduced signature, reduced manning electric drive
ships. DD(X)’s major new systems included Dual Band Radar (DBR), and Advanced Guns System (AGS) with a Long
Range Land Attack Projectile (LRLAP).

November 23, 2005: The program achieved Milestone B. Major outstanding risks at Milestone B were related to the schedule
and cost of software development and the integration and test of Mission Systems, as well as the costs of shipbuilder
construction, DBR and AGS.

April 7, 2006: The DD(X) program was renamed DDG 1000 and detail design contracts for the dual lead ships were
awarded to BIW and Northrop Grumman Shipbuilding (NGSB) (formerly Information Sciences Institute).

December 22, 2007: The ADM was issued authorizing the Navy to enter Production Phase for DDG 1000.

February 13, 2008: The DoD approved LRIP for seven ships, and lead ship construction contracts were awarded to BIW
and NGSB.

July 31, 2008: The Navy provided testimony to the House Armed Services Committee Seapower and Expeditionary forces
Subcommittee requesting Congressional support to truncate the DDG 1000 program and restart the DDG 51 program.

February 2010: The PB FY 2011 budget submission confirmed the reduction of the DDG 1000 Program to three ships as a
result of the Future Surface Combatant Radar Hull Study in which the Navy concluded a modified DDG 51 with an Advanced
Missile Defense Radar was the most cost-effective solution to fleet air and missile defense requirements.

February 1, 2010: The Secretary of the Navy notified Congress of a critical DDG 1000 program Nunn-McCurdy breach to the
PAUC and APUC. This breach was due to the change in ship procurement quantity, not program performance.

June 1, 2010: The USD (AT&L) certified a restructured three-ship program that included removal of the Volume Search
Radar from the ship design, changed the IOC from FY 2015 to FY 2016, and revised test and evaluation requirements

October 8, 2010: Milestone B prime was achieved for the restructured program following the Nunn-McCurdy certification.

March 25, 2011: The APB for the restructured DDG 1000 Program was approved.

March 2013: Due to the FY 2013 sequestration impacts commencing during the execution year, the program experienced
budget reductions of approximately $70.2M of Shipbuilding and Conversion, Navy (SCN) and $10.3M of RDT&E. The
approximate $70.2M FY 2013 SCN sequester prevented the award of a $145M FY 2013 option to Raytheon for remaining
MSE efforts for DDG 1000, 1001, and 1002, necessitating restructuring of the FY 2013, FY 2014, and FY 2015 options. A
Below Threshold Reprograming for $9.999M of RDT&E was approved to continue LRLAP Guided Flight Tests and combat
systems development.

August 2, 2013: The Navy awarded a contract modification for the design and construction of a steel deckhouse, hangar,
and Aft Peripheral Vertical Launch System (PVLS) for DDG 1002 to BIW. The award occurred after the DDG 1002 sole
source negotiation with HII for the procurement of the DDG 1002 composite deckhouse, composite hangar, and Aft PVLS
did not reach an affordable solution and deliveries of these components for DDG 1002 were becoming time critical. The
Navy concurrently pursued a steel deckhouse, hangar, and Aft PVLS using limited competition.

April 12, 2014: DDG 1000 was christened at BIW in Bath, ME.

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December 31, 2015: Raytheon was awarded a contract for remaining DDG 1002 MSE.

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Threshold Breaches

APB Breaches Explanation of Breach

Schedule
Schedule Breach is due to technical risk, shipyard production and
Performance test challenges, and shipyard workforce constraints. The complexity
Cost RDT&E of activation of the ship's unique Engineering Control System and
Procurement Integrated Power System has extended the time required for test and
MILCON activation. Current estimate for First Ship Delivery is mid-2016.
Acq O&M Operational Evaluation, IOC and Milestone C are being assessed in
view of Hull, Mechanical and Electrical (HM&E) delivery delays. An
O&S Cost updated APB is in process.
Unit Cost PAUC
APUC

Nunn-McCurdy Breaches
Current UCR Baseline
PAUC None
APUC None
Original UCR Baseline
PAUC None
APUC None

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Schedule

Schedule Events
SAR Baseline Current APB
Current
Events Development Development
Estimate
Estimate Objective/Threshold
Milestone B Nov 2005 Nov 2005 May 2006 Nov 2005
Lead Ship Awards Jan 2006 Aug 2006 Feb 2007 Aug 2006
Milestone B Re-approval N/A Sep 2010 Mar 2011 Oct 2010
(Ch-1)
First Ship Delivery Sep 2012 Apr 2014 Oct 2014 Apr 20161
(Ch-2)
OPEVAL Sep 2013 Oct 2015 Apr 2016 Dec 20171
(Ch-3)
IOC Jan 2014 Apr 2016 Oct 2016 Dec 20191
(Ch-4)
Milestone C Mar 2015 Apr 2016 Oct 2016 Dec 20191
1
APB Breach

Change Explanations
(Ch-1) The current estimate for First Ship Delivery has changed from November 2015 to April 2016 due to delay in shipyard
contract completion.
(Ch-2) The current estimate for OPEVAL has changed from August 2017 to December 2017 due to delay in shipyard
contract completion.
(Ch-3) The current estimate for IOC has changed from September 2018 to December 2019 due to delay in shipyard
contract completion.
(Ch-4) Milestone C is not applicable since all three ships of the class are under contract and thus IOC is used as the
Milestone C date.

Notes

First Ship Delivery marks completion of DDG 1000 at point of pre-mission system activation. An initial Inspection and Survey
Trial will be performed for HM&E delivery.

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The Navy and the shipbuilder, General Dynamics Bath Iron Works (BIW) have evaluated yard-wide workload and scheduling
for all construction efforts and contracts to address cost effective ship delivery approaches. The program continues to hold
monthly joint BIW and Navy Flag-Level reviews, working closely to prepare for trials and delivery; and to ensure that lessons
learned in the course of building and testing the first of class are being fully leveraged to improve performance on the follow
ships.

Acronyms and Abbreviations

HM&E - Hull, Mechanical, and Electrical
OPEVAL - Operational Evaluation

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Performance

Performance Characteristics
SAR Baseline Current APB
Demonstrated Current
Development Development
Performance Estimate
Estimate Objective/Threshold
Number of Advanced Gun Systems
2 2 2 TBD 2
Number of Advanced Vertical Launch Cells
128 128 80 TBD 80
Total Ship Advanced Gun System Magazine Capacity
1200 rounds (600 1200 rounds (600 600 rounds total ship TBD 600 rounds (300
rounds per magazine) rounds per magazine) magazine capacity rounds per magazine)
Number of ship's company personnel (helicopter detachment included)
125 125 175 TBD 175
Operational Availability (Ao) for mission critical systems:
Ao for 120-day wartime profile
0.95 0.95 0.90 TBD 0.95
Ao for 18 month extended forward deployment
0.95 0.95 0.90 TBD 0.95
Interoperability: All top-level IERs will be satisfied to the standards specified in the Threshold and
Objective values.
Achieve 100% of top- Achieve 100% of top- Achieve 100% top-level TBD Achieve 100% of
level IERs. DD(X) joint level IER. DD(X) joint IER designated as interfaces; services;
tactical battle tactical battle critical. DD(X) joint policy-enforcement
management and management and tactical battle mangage- controls; and data
command and control command and control ment and command and correctness,
computer programs computer programs control computer availability and
shall conform to the shall conform to the programs shall conform processing
SIAP System Engineer' SIAP System to the SIAP System requirements
s Integrated Engineer's Integrated Engineer's Integrated designated as
Architecture and Architecture and Architecture and enterprise-level or
Integrated Architecture Integrated Architecture Integrated Archi-techture critical in the Joint
Behavior Model now Behavior Model now Behavior Model for Track integrated
being developed. DD(X) being developed. DD(X) Management now being architecture. This
will remain in will remain in developed. DD(X) will includes the ORD
compliance with CJCSI compliance with CJCSI remain in compliance threshold
6212.01 (Series), Inter- 6212.01 (Series), Inter- with CJCSI 6212.0 requirements for
operability and Support- operability and Support- (Series), Inter-operability meeting the IERs
ability of IT and NSS, ability of Information and Support-ability of which are listed in
including future Technology and Information Technology DDG 1000 ORD Rev
updates. National Security and National Security 15 (Table B) and the
Systems (IT and NSS), Systems (IT and NSS), DDG 1000 TEMP Rev
including future Including future updates. D (Table D-3).
updates.

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Classified Performance information is provided in the classified annex to this submission.

Requirements Reference
DDX ORD Change 1 dated January 23, 2006

Change Explanations
None

Acronyms and Abbreviations

CJCSI - Chairman of the Joint Chiefs of Staff Instruction
IER - Information Exchange Requirement
IT - Information Technology
NSS - National Security System
Rev - Revision
SIAP - Single Integrated Air Picture
TEMP - Test and Evaluation Master Plan

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Track to Budget

RDT&E

Appn BA PE
Navy 1319 05 0204202N
Project Name
2464 DDG 1000 System Design, Development and
Integration
4009 Advanced Gun System on DDG 1000 (Sunk)
Navy 1319 04 0603513N
Project Name
2465 DC Survivability (Shared) (Sunk)
2467 Advanced Gun System (Shared) (Sunk)
2468 Undersea Warfare (Shared) (Sunk)
2469 Open System Architecture (Shared) (Sunk)
2470 Integrated Topside Design (Shared) (Sunk)
2471 Integrated Power System (Shared) (Sunk)
4019 Radar Upgrades (Shared) (Sunk)
Navy 1319 05 0604300N
Project Name
2463 DD(X) Construction (Shared) (Sunk)
2464 DD(X) Sys Design, Dev & Integration (Shared) (Sunk)
2465 DC Survivability (Shared) (Sunk)
2466 MFR Development (Shared) (Sunk)
2735 Volume Search Radar (Shared) (Sunk)
4009 Advanced Gun System (Shared) (Sunk)
4010 Integrated Power System on DD (X) (Shared) (Sunk)
Navy 1319 05 0604366N
Project Name
0439 Standard Missile Improvement: DDG 1000 (Shared) (Sunk)
Navy 1319 05 0604755N
Project Name
2735 Volume Search Radar (Sunk)

Procurement

Appn BA PE
Navy 1611 02 0204222N
Line Item Name
211900 DDG 1000 FY08-FY09 (Sunk)
Navy 1611 02 0702898N
Line Item Name
211900 Management Headquarters
Navy 1611 02 0204202N

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Line Item Name

211900 DDG 1000 Construction FY10 and follow
Navy 1611 02 0204228N
Line Item Name
211900 DDG 1000 FY05-FY07 (Sunk)
Navy 1611 05 0204222N
Line Item Name
511000 Outfitting/Post Delivery (Shared)
530000 Destroyers - Missile (Sunk)
Navy 1810 01 0204202N
Line Item Name
094700 DDG 1000 Class Support Equipment

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Cost and Funding

Cost Summary

Total Acquisition Cost

BY 2005 $M BY 2005 $M TY $M

Appropriation SAR Baseline Current APB SAR Baseline Current APB

Current Current
Development Development Development Development
Estimate Estimate
Estimate Objective/Threshold Estimate Objective
RDT&E 8313.2 8994.0 9893.4 8844.4 8483.0 9325.5 9175.8
Procurement 23234.7 10195.3 11214.8 10287.3 27813.3 12497.8 13225.2
Flyaway -- -- -- 10287.3 -- -- 13225.2
Recurring -- -- -- 9273.9 -- -- 12065.2
Non Recurring -- -- -- 1013.4 -- -- 1160.0
Support -- -- -- 0.0 -- -- 0.0
Other Support -- -- -- 0.0 -- -- 0.0
Initial Spares -- -- -- 0.0 -- -- 0.0
MILCON 0.0 0.0 -- 0.0 0.0 0.0 0.0
Acq O&M 0.0 0.0 -- 0.0 0.0 0.0 0.0
Total 31547.9 19189.3 N/A 19131.7 36296.3 21823.3 22401.0

Confidence Level
Confidence Level of cost estimate for current APB: 50%

The Independent Cost Estimate (ICE) to support DDG 1000 revised Milestone B decision, like all life-cycle cost estimates
previously performed by the CAPE, is built upon a product-oriented work breakdown structure, based on historical actual
cost information to the maximum extent possible, and, most importantly, based on conservative assumptions that are
consistent with actual demonstrated contractor and government performance for a series of acquisition programs in which
the Department has been successful.

It is difficult to calculate mathematically the precise confidence levels associated with life-cycle cost estimates prepared
for MDAPs. Based on the rigor in methods used in building estimates, the strong adherence to the collection and use of
historical cost information, and the review of applied assumptions, we project that it is about equally likely that the estimate
will prove too low or too high for execution of the program described.

Total Quantity
SAR Baseline
Current APB
Quantity Development Current Estimate
Development
Estimate
RDT&E 0 0 0
Procurement 10 3 3
Total 10 3 3

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Cost and Funding

Funding Summary

Appropriation Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
To
Appropriation Prior FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total
Complete
RDT&E 8972.4 103.2 45.6 19.3 15.6 19.7 0.0 0.0 9175.8
Procurement 11916.7 479.0 343.2 195.3 110.6 77.7 41.9 60.8 13225.2
MILCON 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Acq O&M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
PB 2017 Total 20889.1 582.2 388.8 214.6 126.2 97.4 41.9 60.8 22401.0
PB 2016 Total 20815.1 623.7 272.5 70.0 37.5 41.7 0.0 143.6 22004.1
Delta 74.0 -41.5 116.3 144.6 88.7 55.7 41.9 -82.8 396.9

Quantity Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
FY FY FY FY FY FY To
Quantity Undistributed Prior Total
2016 2017 2018 2019 2020 2021 Complete
Development 0 0 0 0 0 0 0 0 0 0
Production 0 3 0 0 0 0 0 0 0 3
PB 2017 Total 0 3 0 0 0 0 0 0 0 3
PB 2016 Total 0 3 0 0 0 0 0 0 0 3
Delta 0 0 0 0 0 0 0 0 0 0

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Cost and Funding

Annual Funding By Appropriation

Annual Funding
1319 | RDT&E | Research, Development, Test, and Evaluation, Navy
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
1995 -- -- -- -- -- -- 7.0
1996 -- -- -- -- -- -- 10.0
1997 -- -- -- -- -- -- 12.0
1998 -- -- -- -- -- -- 53.5
1999 -- -- -- -- -- -- 215.1
2000 -- -- -- -- -- -- 281.2
2001 -- -- -- -- -- -- 532.4
2002 -- -- -- -- -- -- 490.4
2003 -- -- -- -- -- -- 895.4
2004 -- -- -- -- -- -- 1002.2
2005 -- -- -- -- -- -- 1120.2
2006 -- -- -- -- -- -- 1040.6
2007 -- -- -- -- -- -- 755.8
2008 -- -- -- -- -- -- 516.5
2009 -- -- -- -- -- -- 431.2
2010 -- -- -- -- -- -- 503.8
2011 -- -- -- -- -- -- 347.9
2012 -- -- -- -- -- -- 249.8
2013 -- -- -- -- -- -- 120.8
2014 -- -- -- -- -- -- 189.6
2015 -- -- -- -- -- -- 197.0
2016 -- -- -- -- -- -- 103.2
2017 -- -- -- -- -- -- 45.6
2018 -- -- -- -- -- -- 19.3
2019 -- -- -- -- -- -- 15.6
2020 -- -- -- -- -- -- 19.7
Subtotal -- -- -- -- -- -- 9175.8

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Annual Funding
1319 | RDT&E | Research, Development, Test, and Evaluation, Navy
BY 2005 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
1995 -- -- -- -- -- -- 8.0
1996 -- -- -- -- -- -- 11.3
1997 -- -- -- -- -- -- 13.4
1998 -- -- -- -- -- -- 59.1
1999 -- -- -- -- -- -- 234.8
2000 -- -- -- -- -- -- 302.6
2001 -- -- -- -- -- -- 565.1
2002 -- -- -- -- -- -- 515.3
2003 -- -- -- -- -- -- 927.3
2004 -- -- -- -- -- -- 1009.8
2005 -- -- -- -- -- -- 1099.7
2006 -- -- -- -- -- -- 990.7
2007 -- -- -- -- -- -- 702.4
2008 -- -- -- -- -- -- 471.4
2009 -- -- -- -- -- -- 388.5
2010 -- -- -- -- -- -- 447.2
2011 -- -- -- -- -- -- 301.6
2012 -- -- -- -- -- -- 213.1
2013 -- -- -- -- -- -- 102.0
2014 -- -- -- -- -- -- 157.8
2015 -- -- -- -- -- -- 161.9
2016 -- -- -- -- -- -- 83.5
2017 -- -- -- -- -- -- 36.2
2018 -- -- -- -- -- -- 15.0
2019 -- -- -- -- -- -- 11.9
2020 -- -- -- -- -- -- 14.8
Subtotal -- -- -- -- -- -- 8844.4

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Annual Funding
1611 | Procurement | Shipbuilding and Conversion, Navy
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2005 -- -- -- 304.0 304.0 -- 304.0
2006 -- -- -- 706.2 706.2 -- 706.2
2007 2 2587.6 -- -- 2587.6 -- 2587.6
2008 -- 3009.9 -- 149.8 3159.7 -- 3159.7
2009 1 1504.3 -- -- 1504.3 -- 1504.3
2010 -- 1378.5 -- -- 1378.5 -- 1378.5
2011 -- 247.1 -- -- 247.1 -- 247.1
2012 -- 512.6 -- -- 512.6 -- 512.6
2013 -- 682.4 -- -- 682.4 -- 682.4
2014 -- 312.5 -- -- 312.5 -- 312.5
2015 -- 521.8 -- -- 521.8 -- 521.8
2016 -- 479.0 -- -- 479.0 -- 479.0
2017 -- 309.8 -- -- 309.8 -- 309.8
2018 -- 162.0 -- -- 162.0 -- 162.0
2019 -- 108.4 -- -- 108.4 -- 108.4
2020 -- 75.4 -- -- 75.4 -- 75.4
2021 -- 39.6 -- -- 39.6 -- 39.6
2022 -- 60.8 -- -- 60.8 -- 60.8
Subtotal 3 11991.7 -- 1160.0 13151.7 -- 13151.7

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Annual Funding
1611 | Procurement | Shipbuilding and Conversion, Navy
BY 2005 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2005 -- -- -- 275.1 275.1 -- 275.1
2006 -- -- -- 617.3 617.3 -- 617.3
2007 2 2162.4 -- -- 2162.4 -- 2162.4
2008 -- 2432.5 -- 121.0 2553.5 -- 2553.5
2009 1 1179.4 -- -- 1179.4 -- 1179.4
2010 -- 1044.2 -- -- 1044.2 -- 1044.2
2011 -- 181.2 -- -- 181.2 -- 181.2
2012 -- 367.7 -- -- 367.7 -- 367.7
2013 -- 479.9 -- -- 479.9 -- 479.9
2014 -- 215.7 -- -- 215.7 -- 215.7
2015 -- 354.0 -- -- 354.0 -- 354.0
2016 -- 319.1 -- -- 319.1 -- 319.1
2017 -- 202.5 -- -- 202.5 -- 202.5
2018 -- 103.8 -- -- 103.8 -- 103.8
2019 -- 68.1 -- -- 68.1 -- 68.1
2020 -- 46.4 -- -- 46.4 -- 46.4
2021 -- 23.9 -- -- 23.9 -- 23.9
2022 -- 36.0 -- -- 36.0 -- 36.0
Subtotal 3 9216.8 -- 1013.4 10230.2 -- 10230.2

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Cost Quantity Information

1611 | Procurement | Shipbuilding and Conversion, Navy
End Item
Recurring
Fiscal Flyaway
Quantity
Year (Aligned With
Quantity)
BY 2005 $M
2005 -- --
2006 -- --
2007 2 6474.9
2008 -- --
2009 1 2741.9
2010 -- --
2011 -- --
2012 -- --
2013 -- --
2014 -- --
2015 -- --
2016 -- --
2017 -- --
2018 -- --
2019 -- --
2020 -- --
2021 -- --
2022 -- --
Subtotal 3 9216.8

March 23, 2016

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Annual Funding
1810 | Procurement | Other Procurement, Navy
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2007 -- -- -- -- -- -- --
2008 -- -- -- -- -- -- --
2009 -- -- -- -- -- -- --
2010 -- -- -- -- -- -- --
2011 -- -- -- -- -- -- --
2012 -- -- -- -- -- -- --
2013 -- -- -- -- -- -- --
2014 -- -- -- -- -- -- --
2015 -- -- -- -- -- -- --
2016 -- -- -- -- -- -- --
2017 -- 33.4 -- -- 33.4 -- 33.4
2018 -- 33.3 -- -- 33.3 -- 33.3
2019 -- 2.2 -- -- 2.2 -- 2.2
2020 -- 2.3 -- -- 2.3 -- 2.3
2021 -- 2.3 -- -- 2.3 -- 2.3
Subtotal -- 73.5 -- -- 73.5 -- 73.5

March 23, 2016

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DDG 1000 December 2015 SAR

Annual Funding
1810 | Procurement | Other Procurement, Navy
BY 2005 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2007 -- -- -- -- -- -- --
2008 -- -- -- -- -- -- --
2009 -- -- -- -- -- -- --
2010 -- -- -- -- -- -- --
2011 -- -- -- -- -- -- --
2012 -- -- -- -- -- -- --
2013 -- -- -- -- -- -- --
2014 -- -- -- -- -- -- --
2015 -- -- -- -- -- -- --
2016 -- -- -- -- -- -- --
2017 -- 26.3 -- -- 26.3 -- 26.3
2018 -- 25.7 -- -- 25.7 -- 25.7
2019 -- 1.7 -- -- 1.7 -- 1.7
2020 -- 1.7 -- -- 1.7 -- 1.7
2021 -- 1.7 -- -- 1.7 -- 1.7
Subtotal -- 57.1 -- -- 57.1 -- 57.1

March 23, 2016

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Cost Quantity Information

1810 | Procurement | Other Procurement, Navy
End Item
Recurring
Fiscal Flyaway
Quantity
Year (Aligned With
Quantity)
BY 2005 $M
2007 -- 29.5
2008 -- --
2009 -- 27.6
2010 -- --
2011 -- --
2012 -- --
2013 -- --
2014 -- --
2015 -- --
2016 -- --
2017 -- --
2018 -- --
2019 -- --
2020 -- --
2021 -- --
Subtotal -- 57.1

March 23, 2016

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Low Rate Initial Production

Item Initial LRIP Decision Current Total LRIP

Approval Date 11/22/2005 10/8/2010
Approved Quantity 8 3
Reference Milestone B ADM Milestone B ADM
Start Year 2007 2007
End Year 2014 2009

The Current Total LRIP Quantity is more than 10% of the total production quantity due to the revised Milestone B ADM of
October 8, 2010 reducing the LRIP quantity to three ships, which represents the total quantity remaining on the program.

March 23, 2016

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Foreign Military Sales

None

Nuclear Costs

None

March 23, 2016

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DDG 1000 December 2015 SAR

Unit Cost

Unit Cost Report

BY 2005 $M BY 2005 $M

Item Current UCR % Change

Current Estimate
Baseline
(Dec 2015 SAR)
(Mar 2011 APB)
Program Acquisition Unit Cost
Cost 19189.3 19131.7
Quantity 3 3
Unit Cost 6396.433 6377.233 -0.30
Average Procurement Unit Cost
Cost 10195.3 10287.3
Quantity 3 3
Unit Cost 3398.433 3429.100 +0.90

BY 2005 $M BY 2005 $M
Revised
Item Original UCR Current Estimate % Change
Baseline (Dec 2015 SAR)
(Mar 2011 APB)
Program Acquisition Unit Cost
Cost 19189.3 19131.7
Quantity 3 3
Unit Cost 6396.433 6377.233 -0.30
Average Procurement Unit Cost
Cost 10195.3 10287.3
Quantity 3 3
Unit Cost 3398.433 3429.100 +0.90

March 23, 2016

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DDG 1000 December 2015 SAR

Unit Cost History

BY 2005 $M TY $M
Item Date
PAUC APUC PAUC APUC
Original APB Nov 2005 3154.790 2323.470 3629.620 2781.320
APB as of January 2006 Nov 2005 3154.790 2323.470 3629.620 2781.320
Revised Original APB Mar 2011 6396.433 3398.433 7274.433 4165.933
Prior APB Nov 2005 3154.790 2323.470 3629.620 2781.320
Current APB Mar 2011 6396.433 3398.433 7274.433 4165.933
Prior Annual SAR Dec 2014 6289.367 3357.767 7334.700 4296.600
Current Estimate Dec 2015 6377.233 3429.100 7467.000 4408.400

SAR Unit Cost History

Current SAR Baseline to Current Estimate (TY $M)

Initial PAUC Changes PAUC
Development Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
3629.630 609.833 2104.837 38.100 22.067 1062.533 0.000 0.000 3837.370 7467.000

Current SAR Baseline to Current Estimate (TY $M)

Initial APUC Changes APUC
Development Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
2781.330 606.967 125.469 37.167 -126.500 983.967 0.000 0.000 1627.070 4408.400

March 23, 2016

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DDG 1000 December 2015 SAR

SAR Baseline History

SAR SAR SAR
Current
Item Planning Development Production
Estimate
Estimate Estimate Estimate
Milestone I N/A N/A N/A N/A
Milestone B Nov 2005 Nov 2005 N/A Nov 2005
Milestone C Mar 2015 Mar 2015 N/A Dec 2019
IOC Jan 2014 Jan 2014 N/A Dec 2019
Total Cost (TY $M) 36296.2 36296.3 N/A 22401.0
Total Quantity 10 10 N/A 3
PAUC 3629.620 3629.630 N/A 7467.000

March 23, 2016

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DDG 1000 December 2015 SAR

Cost Variance

Summary TY $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Development 8483.0 27813.3 -- 36296.3
Estimate)
Previous Changes
Economic +11.4 +1813.3 -- +1824.7
Quantity -- -19092.9 -- -19092.9
Schedule +2.8 +57.7 -- +60.5
Engineering +445.7 -379.5 -- +66.2
Estimating +171.4 +2677.9 -- +2849.3
Other -- -- -- --
Support -- -- -- --
Subtotal +631.3 -14923.5 -- -14292.2
Current Changes
Economic -2.8 +7.6 -- +4.8
Quantity -- -- -- --
Schedule -- +53.8 -- +53.8
Engineering -- -- -- --
Estimating +64.3 +274.0 -- +338.3
Other -- -- -- --
Support -- -- -- --
Subtotal +61.5 +335.4 -- +396.9
Total Changes +692.8 -14588.1 -- -13895.3
CE - Cost Variance 9175.8 13225.2 -- 22401.0
CE - Cost & Funding 9175.8 13225.2 -- 22401.0

March 23, 2016

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DDG 1000 December 2015 SAR

Summary BY 2005 $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Development 8313.2 23234.7 -- 31547.9
Estimate)
Previous Changes
Economic -- -- -- --
Quantity -- -14646.0 -- -14646.0
Schedule +1.7 +63.8 -- +65.5
Engineering +385.3 -369.4 -- +15.9
Estimating +94.6 +1790.2 -- +1884.8
Other -- -- -- --
Support -- -- -- --
Subtotal +481.6 -13161.4 -- -12679.8
Current Changes
Economic -- -- -- --
Quantity -- -- -- --
Schedule -- +37.0 -- +37.0
Engineering -- -- -- --
Estimating +49.6 +177.0 -- +226.6
Other -- -- -- --
Support -- -- -- --
Subtotal +49.6 +214.0 -- +263.6
Total Changes +531.2 -12947.4 -- -12416.2
CE - Cost Variance 8844.4 10287.3 -- 19131.7
CE - Cost & Funding 8844.4 10287.3 -- 19131.7

Previous Estimate: December 2014

March 23, 2016

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DDG 1000 December 2015 SAR

RDT&E $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -2.8
Revised estimated for Navy-wide funding adjustments. (Estimating) -4.5 -5.5
Revised estimate due to decision to fund DDG 1000 Class Component and Full Ship Shock +31.6 +41.6
Trials in the RDT&E Account. (Estimating)
Revised estimate to fund Test and Evaluation effort in accordance with the Test and +21.8 +27.5
Evaluation Master Plan. (Estimating)
Revised estimate due to Bipartisan Budget Act reductions. (Estimating) -1.5 -1.9
Adjustment for current and prior escalation. (Estimating) +2.2 +2.6
RDT&E Subtotal +49.6 +61.5

Procurement $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A +7.6
Revised estimate due to cost increases associated with delivery delays. (Schedule) +37.0 +53.8
Revised estimate to reflect shipbuilding completion; and on site support for HM&E test and +234.5 +364.6
activation activities. (Estimating)
Adjustment for current and prior escalation. (Estimating) -5.0 -7.2
Revised estimate due to HM&E Activation. (Estimating) +6.8 +10.0
Revised estimate due budget adjustments (OPN). (Estimating) +0.2 +0.3
Revised estimate due to reduction in Outfitting/Post Delivery; Congressional reductions; FY -59.5 -93.7
2022 Phasing outside the FYDP. (Estimating)
Procurement Subtotal +214.0 +335.4

March 23, 2016

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DDG 1000 December 2015 SAR

Contracts

Contract Identification
Appropriation: Procurement
Contract Name: Phase IV AGS Equipment (DDG 1002)
Contractor: BAE Systems
Contractor Location: 4800 E. River Rd
Minneapolis, MN 55421
Contract Number: N00024-12-C-5311
Contract Type: Fixed Price Incentive(Firm Target) (FPIF), Cost Plus Fixed Fee (CPFF)
Award Date: October 26, 2011
Definitization Date: November 19, 2012

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
73.0 N/A 2 190.4 201.6 2 172.1 173.0

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to initial target was the
not-to-exceed price for hardware being procured under a Undefinitized Contract Action (UCA). Current contract price
represents the target for the full scope of the contract.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/1/2016) -2.7 -1.4
Previous Cumulative Variances +1.9 -6.3
Net Change -4.6 +4.9

Cost and Schedule Variance Explanations

The unfavorable net change in the cost variance is due to subcontractor hardware cost overruns, greater than anticipated
engineering support for magazine testing, and costs incurred from Servo Amplifier Unit repair & rework.

The favorable net change in the schedule variance is due to early completion of magazine assembly, early receipt of vendor
materials for the fixed shields and upper & lower guns.

General Contract Variance Explanation

The unfavorable cumulative cost variance is minor and schedule variance is recoverable; contractor forecasts on-time
contract completion. There is not an impact to in yard need date delivery.

March 23, 2016

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DDG 1000 December 2015 SAR

Notes

The Navy awarded the Advanced Gun System (AGS) for DDG 1002 to British Aerospace Engineering (BAE) on October 26,
2011 as an UCA. The UCA was definitized November 19, 2012. The definitization was delayed by changes in contract
terms and conditions to better control cost and performance and a change in government contracts negotiator personnel.
BAE established the Performance Measurement Baseline for the DDG 1002 effort, and conducted an Integrated Baseline
Review for that effort in April 2013.The contract includes options for FY 2012, FY 2013, and FY 2014 to complete the two
AGS for the DDG 1002 and the supporting systems.

This contract is more than 90% complete; therefore, this is the final report for this contract.

March 23, 2016

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DDG 1000 December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: Phase IV BIW Construciton (DDG 1002)
Contractor: General Dynamics
Contractor Location: 700 Washington Street
Bath, ME 04530
Contract Number: N00024-11-C-2306/881
Contract Type: Fixed Price Incentive (Successive Targets) (FPIS), Firm Fixed Price (FFP)
Award Date: September 15, 2011
Definitization Date: September 15, 2011

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
665.1 N/A 1 673.9 N/A 1 806.6 771.2

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to this being the first
time this contract is reported as a unique effort. Previously, contracts N00024-11-C-2306/880, 881, and 882 were reported
as a single contract effort.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/1/2016) -90.2 -15.2
Previous Cumulative Variances -- --
Net Change -90.2 -15.2

Cost and Schedule Variance Explanations

The unfavorable cumulative cost variance is due to overall effects of shipyard production and test challenges. The program
is aggressively working to minimize the overall exposure and is addressing the cost variance through Cost Reduction
Candidates (CRCs). Through month ending December 2015, the program has processed modifications for $18.6M of
scope reductions for the contract. An additional $3.0M of modifications for scope reductions have been proposed and the
program will continue to identify CRCs.

The unfavorable cumulative schedule variance is due to yard-wide workforce constraints and scheduling impacts.

The Navy and the shipbuilder, General Dynamics Bath Iron Works (BIW) have evaluated yard-wide workload and scheduling
for all construction efforts and contracts to address cost effective ship delivery approaches. The program continues to hold
monthly joint BIW and Navy Flag-Level reviews, working closely to prepare for trials and delivery; and to ensure that lessons
learned in the course of building and testing the first of class are being fully leveraged to improve performance on the follow
ships.

Notes
This is the first time this contract is being reported.

March 23, 2016

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DDG 1000 December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: Phase IV BIW Construction (DDG 1001)
Contractor: General Dynamics
Contractor Location: 700 Washington Street
Bath, ME 04530
Contract Number: N00024-11-C-2306/880
Contract Type: Fixed Price Incentive (Successive Targets) (FPIS), Firm Fixed Price (FFP)
Award Date: September 15, 2011
Definitization Date: September 15, 2011

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
663.4 N/A 1 762.5 N/A 1 915.7 939.2

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to this being the first
time this contract is reported as a unique effort. Previously, contracts N00024-11-C-2306/880, 881, and 882 were reported
as a single contract effort.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/1/2016) -148.0 -66.8
Previous Cumulative Variances -- --
Net Change -148.0 -66.8

Cost and Schedule Variance Explanations

The unfavorable cumulative cost variance is due to overall effects of shipyard production and test challenges in addition to
variances related to redetermination areas, including material and engineering support. The program is aggressively working
to minimize the overall exposure and is addressing the cost variance through Cost Reduction Candidates (CRCs). Through
month ending December 2015, the program has processed modifications for $14.2M of scope reductions for the contract.
An additional $2.4M of modifications for scope reductions have been proposed for the program and will continue to identify
CRCs.

Bath Iron Works (BIW) and the Navy have evaluated yard-wide workload and scheduling for all construction efforts and
contracts to address cost effective ship delivery approaches. The Program Office will continue reviewing that analysis,
including impacts when DDG 1000 starts Post Delivery Availability and Mission Systems Activation, and subsequently
adjusting the related Navy Estimated Price at Completion, if necessary.

The unfavorable cumulative schedule variance is due to yard-wide workforce constraints and scheduling impacts being
addressed in monthly joint BIW and Navy Flag-Level reviews.

Notes
This is the first time this contract is being reported.

March 23, 2016

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DDG 1000 December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: Phase IV BIW Construction (DDG 1002 Steel Superstructure (Deckhouse))
Contractor: General Dynamics
Contractor Location: 700 Washington Street
Bath, ME 04530
Contract Number: N00024-11-C-2306/882
Contract Type: Fixed Price Incentive(Firm Target) (FPIF)
Award Date: August 02, 2013
Definitization Date: August 02, 2013

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
212.0 N/A 1 215.9 237.5 1 183.9 212.1

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to this being the first
time this contract is reported as a unique effort. Previously, contracts N00024-11-C-2306/880, 881, and 882 were reported
as a single contract effort.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/1/2016) +5.4 -29.1
Previous Cumulative Variances -- --
Net Change +5.4 -29.1

Cost and Schedule Variance Explanations

The favorable cumulative cost variance is due to Support and Manufacturing hours at $2.9M and $2.7M respectively with a
negative overall rate offset ($0.8M). The at-complete variance is projected to be positive at $0.6M. This is primarily
attributable to hours at positive $2.8M with a negative rate offset of ($2.2M), or negative ($1.85) per hour. The Support
burden center at positive $2.9M over the life of the project is responsible for the total positive variance due to hours, while the
Manufacturing burden center at negative ($2M) over the life of the project is responsible for the total rate variance at
completion.

The unfavorable cumulative schedule variance is due to yard-wide workforce constraints and scheduling impacts.

General Contract Variance Explanation

The unfavorable schedule variance is due to overall effects of shipyard production and test challenges.

Bath Iron Works (BIW) and the Navy have evaluated yard-wide workload and scheduling for all construction efforts and
contracts to address cost effective ship delivery approaches. The Program Office will continue reviewing that analysis,
including impacts when the DDG 1000 starts Post Delivery Availability and Mission Systems Activation, and subsequently
adjusting the related Navy Estimated Price at Completion, if necessary.

March 23, 2016

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DDG 1000 December 2015 SAR

Notes
This is the first time this contract is being reported.

March 23, 2016

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DDG 1000 December 2015 SAR

Deliveries and Expenditures

Deliveries
Percent
Delivered to Date Planned to Date Actual to Date Total Quantity
Delivered
Development 0 0 0 --
Production 0 0 3 0.00%
Total Program Quantity Delivered 0 0 3 0.00%

Expended and Appropriated (TY $M)

Total Acquisition Cost 22401.0 Years Appropriated 22
Expended to Date 19696.0 Percent Years Appropriated 78.57%
Percent Expended 87.92% Appropriated to Date 21471.3
Total Funding Years 28 Percent Appropriated 95.85%

The above data is current as of February 09, 2016.

March 23, 2016

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DDG 1000 December 2015 SAR

Operating and Support Cost

Cost Estimate Details

Date of Estimate: June 02, 2015
Source of Estimate: Service ICE
Quantity to Sustain: 3
Unit of Measure: Ship
Service Life per Unit: 35.00 Years
Fiscal Years in Service: FY 2017 - FY 2055

O&S cost estimates are based on the 2015 Gate 6 Review of DDG 1000 Class. Costs are shown in BY 2005 dollars.
The estimate is based on an average unit cost of three ships with an average 35 year service life. The estimate includes
separately priced mission system equipment sustainment cost. Mid-life modernization is not included.

The O&S costs are provided in revised cost elements based on the CAPE 2014 O&S Cost-Estimating Guide.

Sustainment Strategy

DDG 1000 maintenance is apportioned to either the ship or a land-based facility. There are two levels of maintenance
planned for the DDG 1000 ship class; "on-ship" - accomplished by ship's force and "off-ship" - accomplished through
maintenance support contracts in addition to legacy Navy maintenance infrastructure. Maintenance support contracts
similar to legacy Multi Ship/Multi Option contracting strategy for repairs and overhauls are planned. The DDG 1000
program provides Integrated Logistics Support oversight and guidance to Participating Acquisition Resource Managers
that develop various sustainment approaches for combat systems and Communications, Command, Control,
Computers, and Intelligence.

Antecedent Information

The most analogous system to DDG 1000 is DDG 51. The DDG 1000 and DDG 51 ships differ in various aspects that
make comparison difficult. Considerations include new technologies, size difference, and an all electric ship design.

The 2014 unit cost of the DDG 51 (Antecedent) is derived using the Naval Visibility and Management of Operating and
Support Costs database and is shown in BY 2005 $M. DDG 51 estimates are based on a service life of 35 years for the
28 Flight I and Flight II ships and 40 years for the 54 Flight IIA and Flight III ships. The DDG 51 reports in BY 1987 $M.

March 23, 2016

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DDG 1000 December 2015 SAR

Annual O&S Costs BY2005 $M

DDG 1000 DDG 51 (Antecedent)
Cost Element
Average Annual Cost Per Ship Average Annual Cost Per Ship
Unit-Level Manpower 12.776 12.640
Unit Operations 8.603 6.960
Maintenance 22.197 3.440
Sustaining Support 8.131 0.920
Continuing System Improvements 15.368 2.870
Indirect Support 6.623 5.730
Other 0.000 0.000
Total 73.698 32.560

Total O&S Cost $M

DDG 1000
Item
Current Development APB DDG 51 (Antecedent)
Current Estimate
Objective/Threshold
Base Year 7744.4 8518.8 7738.3 93259.6
Then Year 15245.3 N/A 14946.0 N/A

Disposal Cost is included in the Operating and Support Cost of the current APB objective and threshold for this program.

Equation to Translate Annual Cost to Total Cost

The equation that links the unitized cost to the total cost for DDG 1000 is Total Cost = average annual cost per ship *
number of ships * service life = $73.7M per Ship x 3 Ships x 35 year (service life) = $7,738.3M (BY 2005)

O&S Cost Variance

BY 2005
Category Change Explanations
$M
Prior SAR Total O&S Estimates - Dec 5740.3
2014 SAR
Programmatic/Planning Factors 0.0
Cost Estimating Methodology 0.0
Cost Data Update 1998.0 Increased costs in personnel, fuel, and Mission System
Equipment Maintenance
Labor Rate 0.0
Energy Rate 0.0
Technical Input 0.0
Other 0.0
Total Changes 1998.0
Current Estimate 7738.3

Disposal Estimate Details

March 23, 2016

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DDG 1000 December 2015 SAR

Date of Estimate: June 02, 2015

Source of Estimate: Service ICE
Disposal/Demilitarization Total Cost (BY 2005 $M): Total costs for disposal of all Ship are 53.7

O&S Baseline data is from MS B recertification Program Life Cycle Cost Estimates (PLCCE).

March 23, 2016

UNCLASSIFIED 44
15:17:06