oversight

Surface Combatants: Navy Faces Challenges Sustaining Its Current Program

Published by the Government Accountability Office on 1997-05-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to Congressional Committees




May 1997
                  SURFACE
                  COMBATANTS
                  Navy Faces Challenges
                  Sustaining Its Current
                  Program




GAO/NSIAD-97-57
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      National Security and
      International Affairs Division

      B-272547

      May 21, 1997

      The Honorable John W. Warner
      Chairman
      The Honorable Edward M. Kennedy
      Ranking Minority Member
      Subcommittee on Seapower
      Committee on Armed Services
      United States Senate

      The Honorable C. W. Bill Young
      Chairman
      The Honorable John P. Murtha
      Ranking Minority Member
      Subcommittee on National Security
      Committee on Appropriations
      House of Representatives

      Surface combatants—cruisers, destroyers, and frigates—represent over one-third of the Navy’s
      war-fighting fleet and a significant portion of the Navy’s annual funding for new ships. This
      report discusses the Navy’s basis for its current and planned surface combatant force, its plans
      to sustain the current force size into the next century, and the key factors that could affect
      future force requirements. We conducted this review under our basic legislative responsibilities
      and are addressing this report to you because we believe it will be useful to your committees in
      their deliberations on future naval force size and composition, particularly on decisions for the
      Arleigh Burke-class destroyer, 21st Century Surface Combatant, and the Arsenal Ship. This
      report contains a recommendation that the Secretary of Defense provide Congress with specific
      information on the basis for the surface combatant force and on the Navy’s plan for sustaining
      the force.

      We are sending copies of this report to the Secretaries of Defense and the Navy and the
      Director, Office of Management and Budget. Copies will also be made available to others on
      request.

      Please contact me on (202) 512-3504 if you or your staff have any questions concerning this
      report. Major contributors to this report are listed in appendix IV.




      Richard Davis
      Director, National Security
        Analysis
Executive Summary


             The Navy currently spends about $3 billion each year to modernize its
Purpose      surface combatant force. The high cost of these ships, especially the
             Arleigh Burke-class destroyer at about $870 million per ship,1 raises
             questions about whether the Navy will be able to sustain the fleet size it
             says is needed to achieve U.S. national security objectives. As a result of
             these concerns, GAO initiated a review to determine (1) the basis for the
             Navy’s current and future force size, (2) the Navy’s plans to sustain the
             current force size into the next century, and (3) key factors that could
             affect future force requirements.


             Surface combatants—cruisers, destroyers, and frigates—provide the Navy
Background   with a wide range of capabilities and choices to satisfy U.S. national
             security objectives. In peacetime, these large, heavily armed multimission
             ships carry out a wide range of day-to-day overseas presence missions and
             enhance U.S. crisis response capabilities. During a conflict, surface
             combatants would conduct combat operations against enemy submarines,
             surface ships, aircraft, missiles, and targets ashore either independently or
             with other military forces. Over the last decade, technological advances,
             such as the Aegis combat system, the vertical launching system (VLS), and
             the capability to launch Tomahawk cruise missiles,2 have significantly
             expanded the range of tasks that the newer, more capable ships entering
             the force can undertake.

             With the end of the Cold War, the Navy significantly reduced its number of
             surface combatants from about 220 in the late 1980s to 125—115 active
             cruisers, destroyers, and frigates and 10 reserve frigates—at the end of
             fiscal year 1996. Although the size of the force has declined, surface
             combatants represent more than one-third of the Navy’s battle force ships,3
             and the proportion and number of ships in the force with the Aegis combat
             system have been increasing, as shown in table 1. According to the Navy,
             Aegis-capable ships are considered to be effective in numerous


             1
              This figure is based on the procurement of four Arleigh Burke-class destroyers in fiscal year 1997. The
             cost for each destroyer depends on the number of ships built each year and the changes made to the
             ship’s design in that year’s procurement.
             2
              Aegis is an integrated network of computers and displays linked to sensors and weapon systems
             capable of simultaneously detecting, tracking, and engaging numerous air and surface targets. VLS is a
             computer-controlled launching system that can store, select, initialize, and rapidly launch different
             type missiles. Tomahawk is an all-weather, subsonic missile capable of striking sea and land targets
             located more than 500 miles away. It is launched from surface combatants or attack submarines.
             3
              Other battle force ships include active and reserve aircraft carriers, amphibious ships, strategic and
             attack submarines, patrol and mine warfare ships, and logistics ships. At the end of fiscal year 1996,
             the Navy had 359 battle force ships.



             Page 2                                                 GAO/NSIAD-97-57 Navy Surface Combatants
                                         Executive Summary




                                         war-fighting areas and tasks and are best able to defend themselves and
                                         protect other forces while providing critical support to ground forces.


Table 1: Number of Aegis-Capable Surface Combatants by Fiscal Year
                                                             Actual                           Funded                        Planned
                                                           1990      1993      1996         1999      2002          2005      2007      2010
Ticonderoga-class cruisersa                                  16        26         27           27        27            27        27           27
Arleigh Burke-class destroyers                                 0         2        16           28        37            46        51           57
Total for Aegis-capable surface combatants                   16        28         43           55        64            73        78           84
Percentage of surface combatants that are Aegis
capable                                                        8       19         34           43        49            54        57           59
Total for all surface combatants                            199       148       125           127       130          136       137        142
                                         a
                                          The first five Ticonderoga-class cruisers have an early, less capable version of the Aegis combat
                                         system and do not have VLS or the capability to launch Tomahawk cruise missiles.



                                         The Navy is currently building only one class of surface combatant—the
                                         Arleigh Burke destroyer. The Navy has 38 Arleigh Burke-class destroyers
                                         in its force, under construction, or under contract as of April 21, 1997, and
                                         plans to procure an additional 19 destroyers through the next decade.
                                         Completion of the Arleigh Burke destroyer program, along with the earlier
                                         procurement of Ticonderoga-class cruisers, will allow the Navy to achieve
                                         a force of 84 Aegis-capable surface combatants by fiscal year 2010. The
                                         Navy is completing a cost and operational effectiveness analysis for a new
                                         surface combatant—known as the 21st Century Surface
                                         Combatant—sometime in 1997. This analysis will help determine the
                                         surface combatant force levels and mix and the design or designs for this
                                         new ship, which will begin construction around fiscal year 2003 and enter
                                         the fleet starting around fiscal year 2009.

                                         As mandated by the National Defense Authorization Act for Fiscal Year
                                         1997, the Secretary of Defense is conducting a comprehensive quadrennial
                                         review of the defense program. This review, expected to be completed by
                                         May 15, 1997, is intended to assess defense needs through the year 2005
                                         and examine strategy, force structure, and modernization plans. The act
                                         also requires an independent panel of defense experts to submit a
                                         comprehensive assessment of DOD’s report and conduct an assessment of
                                         alternative force structures through the year 2010 and beyond by
                                         December 1, 1997.




                                         Page 3                                              GAO/NSIAD-97-57 Navy Surface Combatants
                   Executive Summary




                   The Department of Defense (DOD) and the Navy are pursuing a surface
Results in Brief   combatant force size and construction program based largely on budget
                   priorities, industrial base concerns, and operational requirements. DOD has
                   not clearly explained the link and any underlying assumptions between the
                   force and the national military strategy. DOD and Navy studies illustrate
                   that the size of the force can vary widely depending on the specific
                   assumptions considered. An explanation of the linkage between force size
                   and key assumptions would assist Congress in evaluating the
                   appropriateness of the Navy’s surface combatant program.

                   The Navy can sustain at least 125 surface combatants through 2013 if it
                   (1) completes its Arleigh Burke-class destroyer construction program as
                   planned, (2) maintains its current build rate of three ships a year, and
                   (3) retains existing ships in its inventory for their expected service lives.
                   However, these conditions hinge on the Navy’s ability to sustain budget
                   levels to support its ship construction plans, successfully compete with
                   other Navy and defense programs, and retain its surface combatants
                   longer than achieved for previous ships.

                   Several factors could affect the size, composition, and overall capability of
                   the surface combatant force through the middle of the next century. These
                   factors include (1) decisions related to the appropriate size and mix of
                   surface combatants within the Navy and other DOD priorities; (2) the
                   design and construction program for the 21st Century Surface Combatant;
                   (3) the results of DOD’s ongoing quadrennial defense review, which could
                   change the planning parameters for meeting the mandates of the U.S.
                   military strategy; (4) introduction of new or improved capabilities that
                   could affect doctrine, operational concepts, and responsibilities for the
                   force; (5) introduction of the Arsenal Ship, which could lead DOD and the
                   Navy to reexamine force requirements and employment; and (6) force
                   efficiency strategies, such as expanded overseas home porting and
                   alternative deployment schemes, which could help to increase force
                   availability and use.




                   Page 4                                   GAO/NSIAD-97-57 Navy Surface Combatants
                           Executive Summary




Principal Findings

Basis for the Surface      The post-Cold War Bottom-Up Review concluded that a Navy comprised
Combatant Force Has Not    of 346 battle force ships4 would be sufficient to carry out the U.S. military
Been Clearly Explained     strategy by fiscal year 1999. It did not, however, specify a force goal for
                           surface combatants. In congressional presentations subsequent to the
                           review, DOD and the Navy indicated that 120 to 126 surface combatants
                           would be needed to meet national security objectives. However, this force
                           was determined largely from budget-driven priorities. DOD’s current Future
                           Years Defense Program, for fiscal years 1998 through 2003, supports a
                           force of at least 125 surface combatants that, according to DOD officials, is
                           largely based on budget, industrial base, and operational considerations.
                           DOD has not yet established a long-term surface combatant goal based on
                           the number of ships it needs to implement the national security strategy.

                           DOD has not clearly explained the process used to determine the number of
                           surface combatants needed to fulfill the two nearly simultaneous major
                           regional conflict (MRC) scenario specified in DOD guidance or the number
                           needed to meet desired levels of peacetime presence, as it has done with
                           aircraft carriers. It is unclear what key assumptions support the force size,
                           such as expected allied contributions to war-fighting objectives.
                           Information is also unclear concerning the Navy’s assumptions on the
                           expected service lives of the ships; the pace of the shipbuilding program;
                           the funding level required to sustain the force within and beyond the
                           current Future Years Defense Program; or the effect of emerging
                           technologies and concepts, such as the Arsenal Ship, on force
                           requirements and levels. DOD officials told us that DOD and the Navy are
                           currently examining these issues as part of ongoing studies, such as the
                           quadrennial defense review.


Navy Faces Challenges in   The Navy will retire a large number of its older surface combatants as they
Sustaining Its Force       reach the end of their estimated service lives over the next 2 decades. GAO
                           estimates, using the Navy’s notional service life estimates, that the Navy
                           will retire about 75 of its surface combatants between fiscal year 2000 and
                           2020. Although a relatively small number of ships are expected to retire
                           early next decade, the majority of retirements—55 ships—will occur
                           between fiscal year 2011 and 2018. The ships retiring in these years are the


                           4
                            Assessments and programming decisions subsequent to the Bottom-Up Review have modified the
                           projected fleet size to about 330 to 346 ships.



                           Page 5                                           GAO/NSIAD-97-57 Navy Surface Combatants
Executive Summary




Navy’s remaining non-Aegis ships—the Oliver Hazard Perry-class frigates
and the Spruance- and Kidd-class destroyers.

By completing the 57-ship Arleigh Burke program, maintaining its current
building rate for the new 21st Century Surface Combatant, and retaining
ships to their expected service lives, the Navy can sustain at least 125
ships through 2013. The Navy is currently procuring about three Arleigh
Burke destroyers annually, with construction taking about 5 years before
the ship is delivered to the force. The Navy believes that this rate is the
minimum needed to ensure that the shipbuilding industry makes the
necessary investment and manages its overhead to reduce Navy program
costs. The last Arleigh Burke destroyer is due to be delivered to the fleet
around fiscal year 2010. The Navy plans to start building the 21st Century
Surface Combatant around fiscal year 2003 and ships will begin to enter
the fleet around fiscal year 2009.

The Navy’s ability to achieve and sustain a desired force size is affected by
the service lives of existing ships, cost of new ships, and funds Congress
makes available to build ships. DOD officials note that the cost of operating
and supporting the current fleet and other Navy and defense mission
priorities also affect surface combatant force size. Navy cruisers and
destroyers have historically been retired by 30 years of service and frigates
by 22 years of service. In recent force planning for ships, the Navy uses
notional estimated service lives of 35 years for Aegis-capable cruisers and
all current classes of destroyers and 24- to 32-year service lives for most
Oliver Hazard Perry-class frigates retiring after fiscal year 1999. The extent
to which these longer service lives can be achieved will have an important
bearing on whether the Navy is able to sustain a force of at least 125 ships
through 2013.

The high cost of surface combatants is also an important factor in
sustaining the force. Acquisition of new surface combatants represents a
large portion of the Navy’s annual ship and overall procurement funding.
Between fiscal year 1990 and 1996, the Navy allocated about 44 percent of
its annual funding for ship construction and conversion to surface
combatants and about 14 percent of its overall annual procurement
funding. Congress appropriated $3.6 billion for construction of 4 new
destroyers in fiscal year 1997 and gave the Navy authority to procure a
total of 12 destroyers in fiscal years 1998 through 2001 using a multiyear
acquisition strategy. In its biennial budget submission for fiscal years 1998
and 1999, the Navy is requesting about $2.8 billion and $2.7 billion,
respectively, for the procurement of six destroyers. Continuing this level



Page 6                                  GAO/NSIAD-97-57 Navy Surface Combatants
                             Executive Summary




                             of post-Cold War annual investment could prove increasingly difficult over
                             the long term with the many competing defense modernization programs
                             and other force and readiness priorities in the overall defense program.


Several Factors Could        Several upcoming DOD and Navy decisions are likely to affect the
Affect Future Force Levels   capabilities, size, and composition of the overall force for many decades.
                             For example, an ongoing cost and operational effectiveness analysis for
                             the 21st Century Surface Combatant is due to be completed in 1997 and
                             will be followed later that year by a decision for approval to begin a new
                             acquisition program. In addition, the Navy will be selecting contractor
                             teams to do detailed design work on the Arsenal Ship in early 1998, and
                             Congress will face annual budget decisions on procuring the remaining
                             Arleigh Burke-class destroyers through fiscal year 2005.

                             Several longer term factors could affect the Navy’s future surface
                             combatant force. For example, the ongoing quadrennial defense review
                             could alter the parameters used to plan the future defense program as a
                             whole. Depending on the nature and extent of these changes, the size,
                             composition, required capability, and employment of the surface
                             combatant force, as well as other major military components, could be
                             significantly altered. For example, a recent Navy study illustrated the
                             effect on force size of changing the two nearly simultaneous MRC
                             requirement. With the assumption that a 145-ship force of current ship
                             types, with some allied support, is needed for the current MRC requirement,
                             the assessment calculated that changing the requirement to two
                             simultaneous MRCs could increase the required force size by about
                             20 ships. Changing the requirement to two sequential MRCs or one MRC
                             could reduce the war-fighting force requirement by as much as 45 ships
                             (assuming some allied support).

                             Technological innovations could also affect the requirement for surface
                             combatants. These improvements could provide greater efficiencies in the
                             use of the force and allow changes in doctrine and operational concepts
                             that could reduce force requirements. These include improvements to the
                             Tomahawk cruise missile, which could allow the missile to be used for
                             tactical applications in support of ground operations; modifications to the
                             Aegis combat system and Standard missile, which could provide a defense
                             against theater ballistic missile attacks while operating in littoral areas;
                             and introduction of the Cooperative Engagement Capability on existing
                             and new combatants, other ships, and airborne elements, which will
                             enhance ship self-defense capabilities by increasing response time and the



                             Page 7                                  GAO/NSIAD-97-57 Navy Surface Combatants
                      Executive Summary




                      amount of information available to defend against antiship cruise missile
                      threats. It is also possible that the introduction of the Arsenal Ship, which
                      would carry a large inventory of missiles and potentially serve several
                      military purposes, could permit the Navy and the other services to retire or
                      forego purchases of some assets, such as aircraft carriers, surface
                      combatants, ground-based launchers, or combat aircraft.

                      Potential changes in operational practices could increase the availability
                      of ships for deployment in peacetime. These changes include
                      consideration of additional overseas home ports and changes to
                      deployment schemes and personnel policies, such as shortening the time
                      between deployments. Lengthening the deployment period, rotating crews,
                      increasing transit speeds, and using different maintenance schemes are
                      other potential options to increase the availability of ships for deployment
                      in peacetime. These options may offer opportunities for the Navy to
                      achieve national security objectives more efficiently as it operates with a
                      smaller force structure and possibly smaller budgets.


                      GAO recommends that the Secretary of Defense provide Congress with
Recommendations       specific information regarding the surface combatant force. Such
                      information should include the

                  •   number and types of surface combatants that are needed to fight and win
                      two nearly simultaneous MRCs;
                  •   number of ships that are needed to meet peacetime forward presence
                      objectives;
                  •   key assumptions that support the force level and mix, such as expected
                      allied contributions;
                  •   expected impact of new technologies and capabilities on the size and
                      composition of the future force; and
                  •   impact of the Arsenal Ship on the surface combatant force structure.

                      GAO  also recommends that the Secretary provide information on the Navy’s
                      plan to sustain the surface combatant force level, including key
                      assumptions regarding expected service lives, pace of the shipbuilding
                      program, types of ships, required funding, and any other factor that might
                      alter the requirement.


                      DOD concurred with the information in this report and the
Agency Comments       recommendation. DOD stated that the information regarding surface



                      Page 8                                  GAO/NSIAD-97-57 Navy Surface Combatants
Executive Summary




combatants listed in the recommendation would be provided to Congress
as a result of the ongoing quadrennial defense review. DOD indicated that
the results of the review should provide a basis for understanding future
surface combatant needs. Although the review could establish a strategic
context for surface combatants, as did DOD’s 1993 Bottom-Up Review, GAO
believes that the broad scope of the review may not adequately provide
the specific discussion of surface combatant requirements that the
recommendation is intended to provide. Thus, considering the significant
investment and annual budget requirements needed for surface
combatants, GAO has retained the recommendation. DOD’s comments
appear in appendix III.




Page 9                                GAO/NSIAD-97-57 Navy Surface Combatants
Contents



Executive Summary                                                                                 2


Chapter 1                                                                                        14
                        Objectives, Scope, and Methodology                                       27
Introduction
Chapter 2                                                                                        31
                        Revised Defense Strategies Have Reduced the Size of the Surface          31
Surface Combatant         Combatant Force
Program Is Not          Current Strategy Calls for Fighting Two Conflicts                        33
                        Forward Deployed Ships Help Satisfy Crisis Response and                  35
Clearly Linked to the     Presence Mandates
National Military       Forward Presence Is a Key Component of Defense Strategy                  37
Strategy                Force Size Varies Widely Based on Assumptions                            40

Chapter 3                                                                                        43
                        Ship Retirements Could Affect Future Surface Combatant                   43
Navy Can Sustain Its      Requirements
Current Force Size      Retaining Ships Longer Helps to Mitigate New Construction                47
                          Requirements
Through 2013            Navy May Have Difficulty Financing Its Shipbuilding Program              52

Chapter 4                                                                                        60
                        Near-term Decisions Could Affect the Force for Many Decades              60
Several Factors Could   Review May Change DOD Planning Parameters for Meeting                    62
Affect the Future         National Security Objectives
                        New Capabilities Could Affect Surface Combatant Roles and                63
Surface Combatant         Missions
Force                   Arsenal Ship Could Significantly Augment Surface Force                   67
                          Capabilities
                        Opportunities May Exist to Improve Force Efficiencies                    69

Chapter 5                                                                                        71
                        Conclusions                                                              71
Conclusions and         Recommendations                                                          73
Recommendations         Agency Comments and Our Evaluation                                       74




                        Page 10                              GAO/NSIAD-97-57 Navy Surface Combatants
             Contents




Appendixes   Appendix I: Selected Carrier Battle Group Deployments                    76
             Appendix II: Operational Factors That Affect How Surface                 79
               Combatants Are Employed
             Appendix III: Comments From the Department of Defense                    85
             Appendix IV: Major Contributors to This Report                           87

Tables       Table 1: Number of Aegis-Capable Surface Combatants by Fiscal             3
               Year
             Table 1.1: Selected Capabilities of Surface Combatant Classes            20
             Table 2.1: DOD Force Structure Goals for Surface Combatants              32
               and Battle Force Ships
             Table 2.2: Surface Combatants in the Navy’s Notional                     40
               Configuration and Recent Atlantic and Pacific Fleet
               Carrier Battle Groups
             Table 3.1: Navy’s Shipbuilding Plan for Surface Combatants               44
             Table 3.2: Historical Service Lives for Navy Surface Combatants          48
               Built After World War II
             Table 3.3: Recent Annual Funding for Surface Combatants, Other           53
               Ships, and Overall Navy Procurement
             Table 3.4: Examples of Competing Navy Procurement Programs               57
               and Their Estimated Costs
             Table I.1: Atlantic Fleet Carrier Battle Group Deployments               76
             Table I.2: Pacific Fleet Carrier Battle Group Deployments                77

Figures      Figure 1.1: Changes in Surface Combatant Force Levels From               15
               Fiscal Year 1988 to 2010
             Figure 1.2: Number of Aegis-Capable Surface Combatants in the            17
               Navy’s Fleet Through Fiscal Year 2010
             Figure 1.3: Arleigh Burke-class Destroyers, U.S.S. Ramage and            25
               U.S.S. Gonzalez
             Figure 2.1: U.S.S. Valley Forge Aegis Cruiser Stops and                  36
               Interrogates a Merchant Ship Crew Suspected of Violating
               Sanctions Against Iraq
             Figure 2.2: Peacetime Presence Operations of Surface                     38
               Combatants
             Figure 3.1: Projected Surface Combatant Retirements From                 45
               Fiscal Year 2000 to 2020
             Figure 3.2: Major Factors That Sustain the Surface Combatant             46
               Force




             Page 11                              GAO/NSIAD-97-57 Navy Surface Combatants
Contents




Figure 3.3: Projected Surface Combatant Force Levels Achieved             51
  at Various Service Life Estimates
Figure 3.4: Annual Funding Requirements for Surface Combatant             55
  Concepts at Various Procurement Rates
Figure 4.1: Projected Force Lives of Selected Surface Combatant           61
  Classes
Figure 4.2: An Aegis Cruiser Launching a Tomahawk Cruise                  65
  Missile Against An Iraqi Target
Figure 4.3: Design Proposals for the Navy’s Arsenal Ship Concept          68
Figure II.1: U.S.S. John Hancock and U.S.S. Thorn Undergoing              80
  Routine Overhauls
Figure II.2: Underway Replenishment Operations in the Arabian             84
  Gulf




Abbreviations

DOD             Department of Defense
GAO             General Accounting Office
MRC             major regional conflict
NATO            North Atlantic Treaty Organization
OPTEMPO         operating tempo
PERSTEMPO       personnel tempo
VLS             vertical launching system


Page 12                               GAO/NSIAD-97-57 Navy Surface Combatants
Page 13   GAO/NSIAD-97-57 Navy Surface Combatants
Chapter 1

Introduction


               Surface combatants—cruisers, destroyers, and frigates—are an essential
               component in most naval and joint force operations. These large, heavily
               armed multimission ships provide U.S. decisionmakers with a wide range
               of capabilities and choices to satisfy some overseas presence, crisis
               response, and war-fighting missions. The overall number of surface
               combatants has steadily declined over the last decade as the Department
               of Defense (DOD) has reduced the size of its military forces in response to
               the end of the Cold War and shifting defense priorities. To reduce its Cold
               War force, the Navy retired many of its older, less capable surface
               combatants before the end of their planned service lives. Frigates were
               reduced more than other surface combatants because of the diminished
               threat to naval carrier battle groups and merchant shipping in the open
               ocean. The Navy had 199 surface combatants at the end of fiscal year 1990
               and 125 ships at the end of fiscal year 1996. The number of ships will
               remain at or about the 1996 level through fiscal year 2001 but will
               gradually increase through the next decade to 142 ships in fiscal year 2010.
               Figure 1.1 shows the force level changes for cruisers, destroyers, and
               frigates during fiscal years 1988 through 2010.




               Page 14                                GAO/NSIAD-97-57 Navy Surface Combatants
                                               Chapter 1
                                               Introduction




Figure 1.1: Changes in Surface Combatant Force Levels From Fiscal Year 1988 to 2010

Number of ships




200




150




100




 50




  0
      88   89   90   91   92   93   94    95   96     97   98 99 00          01     02    03    04    05    06    07    08    09    10
                                                            Fiscal year

                                                                                     21st Century
                                    Cruisers        Destroyers       Frigates
                                                                                     Surface Combatant


                                               Source: Our analysis of Navy data.




                                               Although the number of surface combatants has declined, the proportion
                                               and number of ships in the force with the Aegis combat system continues
                                               to increase.1 For example, the Navy had only 16 Aegis-capable combatants

                                               1
                                                The Aegis combat system is an integrated network of computers and displays linked to sensors and
                                               weapon systems. It is capable of simultaneously detecting, tracking, and engaging numerous air and
                                               surface targets. The system is designed to defeat a wide range of targets from the water’s surface to
                                               directly overhead. The Navy considers the Aegis system to be effective against antiship cruise missiles
                                               and manned aircraft in all environmental conditions. It has an all-weather capability and outstanding
                                               abilities against electronic countermeasures. The Navy plans to upgrade the Aegis system to
                                               incorporate a capability to defend against theater ballistic missile attacks.



                                               Page 15                                               GAO/NSIAD-97-57 Navy Surface Combatants
Chapter 1
Introduction




in fiscal year 1990, but at the end of fiscal year 1996 had 43. Completion of
the 57 ships in the Arleigh Burke-class destroyer program, along with the
earlier procurement of 27 Ticonderoga-class cruisers, will bring the total
number of Aegis-capable ships to 84 by fiscal year 2010 and these ships
will comprise about 60 percent of the planned surface combatant force.
With the exception of the first five Ticonderoga-class cruisers, all
Aegis-capable ships will have the vertical launching system (VLS) to fire
Tomahawk cruise and Standard surface-to-air missiles.2 The planned Aegis
ship force in 2010 will have about 8,000 VLS cells compared with about
4,600 cells today.3 Figure 1.2 shows the changes in the number of
Aegis-capable ships from fiscal year 1990 to 2010.




2
 VLS is a computer-controlled launching system that can store, select, initialize, and rapidly launch
different type missiles. Tomahawk is an all-weather, subsonic missile that is capable of striking sea
and land targets more than 500 miles away. It is launched from surface combatants or attack
submarines. Standard is an all-weather, medium- to long-range, fleet air defense missile that is
launched from surface combatants against missiles, aircraft, and ships. The Navy is developing a new
version in the family of missiles to provide a future capability to defend against ballistic missiles.
3
 In 2010, Spruance-class destroyers would provide an additional 1,400 VLS cells. The proposed Arsenal
Ship force, if built as planned, will have between 2,000 and 3,000 VLS cells. Nuclear attack submarines
also provide VLS capability.


Page 16                                               GAO/NSIAD-97-57 Navy Surface Combatants
                                         Chapter 1
                                         Introduction




Figure 1.2: Number of Aegis-Capable Surface Combatants in the Navy’s Fleet Through Fiscal Year 2010

Number of ships



200




150




100




 50




  0
        90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
                                   Fiscal year

                                              Aegis         Non-Aegis
                                         Source: Our analysis of Navy data.




                                         The Navy categorizes its multimission surface combatants as either
                                         Aegis-capable or non-Aegis ships. Aegis-capable ships are considered to be
                                         effective in numerous war-fighting areas and tasks and are best able to
                                         defend themselves and protect other forces while providing critical
                                         support to ground forces. Non-Aegis ships are fully capable in several
                                         mission areas but have more limited capability in air defense missions.



                                         Page 17                                   GAO/NSIAD-97-57 Navy Surface Combatants
Chapter 1
Introduction




Non-Aegis ships include the nuclear-powered Virginia- and California-class
cruisers, the Kidd- and Spruance-class destroyers, and the Oliver Hazard
Perry-class frigates.

The distinction among surface combatants is primarily the extent of the
ship’s capabilities, although Aegis-capable ships are normally considered
more survivable in more stressing threat environments. For example,
Spruance-class destroyers have excellent strike and antisubmarine
mission capabilities, but they are limited to self-defense against a narrow
range of air threats. The Navy believes that the capabilities of
Aegis-capable surface combatants and their ability to perform many tasks
simultaneously provide greater flexibility in its operations than non-Aegis
ships. Table 1.1 provides some of the major capabilities and differences of
cruisers, destroyers, and frigates in the force at the end of fiscal year 1996.




Page 18                                  GAO/NSIAD-97-57 Navy Surface Combatants
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Page 19        GAO/NSIAD-97-57 Navy Surface Combatants
                                      Chapter 1
                                      Introduction




Table 1.1: Selected Capabilities of
Surface Combatant Classes
                                                                          Number of ships as    Initial operational
                                      Classa                                of Sept. 30, 1996      capability date
                                      Cruiser
                                      Ticonderoga (CG-47)c                                22                 1986




                                      Ticonderoga (CG-47)— without VLSd                    5                 1983




                                      Virginia (CGN-38)                                    2                 1976




                                      California (CGN-36)                                  2                 1974




                                      Destroyer
                                      Arleigh Burke (DDG-51)                              16                 1991




                                      Kidd (DDG-993)                                       4                 1981




                                      Spruance (DD-963)                                   31                 1975




                                      Page 20                             GAO/NSIAD-97-57 Navy Surface Combatants
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                                           Introduction




Approximate date of           Full-load                                                        Embarked
   last ship in class    displacement     Major combat                                         helicopter        Number of
              retiredb             tons   system            Major weapon systems               aircraft           VLS cells


                2029             9,600    Aegis             Tomahawk missile                    2 SH-60Bs               122
                                                            Standard missile
                                                            Antisubmarine rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon system
                2022             9,600    Aegis             Standard missile                    2 SH-60Bs or              0
                                                            Harpoon missile                     2 SH-2Fsd
                                                            Antisubmarine rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon system
                1998            11,000    New Threat        Tomahawk missile                    None                      0
                                          Upgrade           Standard missile
                                                            Harpoon missile
                                                            Antisubmarine Rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon system
                2004            10,450    New Threat        Standard missile                    None                      0
                                          Upgrade           Harpoon missile
                                                            Antisubmarine rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon system


                2045             8,300    Aegis             Tomahawk missile                    Plannede                 90e
                                                            Standard missile
                                                            Harpoon missilee
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon systeme
                2017             9,900    New Threat        Standard missile                    1 SH-2F                   0
                                          Upgrade           Harpoon missile
                                                            Antisubmarine rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in weapon system
                2018             9,100    NATO Sea          Tomahawk missile                    2 SH-60Bs                61
                                          Sparrow Surface   Harpoon missile
                                          Missile System    NATO Sea Sparrow missile
                                                            Antisubmarine rocket
                                                            MK-46 torpedo
                                                            MK-45 5”/54 caliber lightweight gun
                                                            Phalanx close-in-weapon system
                                                                                                                 (continued)




                                           Page 21                                   GAO/NSIAD-97-57 Navy Surface Combatants
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                              Number of ships as    Initial operational
Classa                          of Sept. 30, 1996      capability date
Frigate
Oliver Hazard Perry (FFG-7)                   43f                1977




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                                           Chapter 1
                                           Introduction




Approximate date of           Full-load                                                                      Embarked
   last ship in class    displacement     Major combat                                                       helicopter               Number of
              retiredb             tons   system                   Major weapon systems                      aircraft                  VLS cells


                2018             4,100    Other                    Standard missile                          2 SH-60Bs or                          0
                                                                   Harpoon missile                           1 SH-2Fg
                                                                   MK-46 torpedo
                                                                   MK-75 3”/62 caliber rapid fire gun
                                                                   Phalanx close-in weapon system
                                           a
                                            Specific capabilities of individual ships or groups of ships in a class may vary because of
                                           modifications and upgrades.
                                           b
                                            Retirement date assumes a 35-year service life for Ticonderoga-class cruisers and all classes of
                                           destroyers, and current service life plans for Virginia- and California-class cruisers and the Oliver
                                           Hazard Perry-class frigates.
                                           c
                                               Ticonderoga-class cruisers are from Bunker Hill (CG-52) through Port Royal (CG-73).
                                           d
                                            The first five Ticonderoga-class cruisers—Ticonderoga (CG-47) through Thomas S. Gates
                                           (CG-51)—have an early, less capable version of the Aegis combat system and do not have VLS
                                           or the capability to launch Tomahawk cruise missiles. Also, the first two ships of the class have
                                           two SH-2F helicopters instead of the SH-60B helicopter employed on later cruisers.
                                           e
                                            The first 28 Arleigh Burke-class destroyers have a helicopter deck but no hanger or embarked
                                           helicopters. Beginning with DDG-79, a helicopter capability—with two embarked SH-60B/F
                                           helicopters equipped with the Light Airborne Multipurpose System —will be added for the
                                           remaining 29 ships of the class. The modifications require removal of Harpoon missile capability.
                                           Also beginning with this ship, the number of VLS cells will be increased from 90 to 96, and the
                                           Phalanx close-in weapon system will be replaced by vertical-launched the North Atlantic Treaty
                                           Organization (NATO) Evolved Sea Sparrow missiles when they become available.
                                           f
                                            The Navy currently maintains about 10 Oliver Hazard Perry-class frigates in the Naval Reserve
                                           Force to help fill short-term overseas and presence requirements near the United States. All other
                                           cruisers, destroyers, and frigates are in the active fleets.
                                           g
                                            The use of either two SH-60B helicopters or one SH-2F helicopter varies throughout the class.
                                           However, two SH-60B helicopters are generally used on the most recently built frigates.

                                           Source: Our analysis of multiple source data.



                                           The Navy considers the newest Arleigh Burke-class destroyer to be its
                                           most capable and survivable surface combatant. Originally designed to
                                           defend against Soviet aircraft, cruise missiles, and nuclear attack
                                           submarines, this higher capability ship is to be used in high-threat areas to
                                           conduct antiair, antisubmarine, antisurface, and strike operations. It is
                                           equipped with an enhanced air and surface multifunctional phased array
                                           radar,4 an Aegis combat system, and VLS. The Navy is also adding several



                                           4
                                            The radar system—the AN/SPY-1—is the primary air and surface radar for the Aegis combat system. It
                                           is a multifunctional phased array radar capable of search, automatic detection, air and surface target
                                           tracking, and missile engagement support.



                                           Page 23                                               GAO/NSIAD-97-57 Navy Surface Combatants
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new capabilities to better adapt the ship for war-fighting in littoral areas.5
For example, the future version of the ship—Flight IIA—will have an
embarked helicopter capability, improved surface-to-air missiles, and
increased VLS capacity for missiles. Over the next several years, the Navy
plans to upgrade the ship’s multifunctional phased array radar to improve
its capabilities while operating in littoral environments and add new
capabilities to permit sharing targeting data with other Navy and joint
sensors and defend against theater ballistic missiles. Figure 1.3 shows two
Arleigh Burke-class destroyers, the U.S.S. Ramage (DDG-61) and U.S.S.
Gonzalez (DDG-66).




5
 Littoral areas extend from the shore to open ocean, generally out to 300 nautical miles, and inland
from the shore over that extensive area that can be supported and controlled directly from the sea.



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Figure 1.3: Arleigh Burke-class Destroyers, U.S.S. Ramage and U.S.S. Gonzalez




                                          Note: The Navy believes the Arleigh Burke-class destroyer is critical to its fleet modernization plan
                                          by supporting future surface combatant force levels and providing the capabilities it considers
                                          essential in littoral warfare. The U.S.S. Ramage is on the left, and the U.S.S. Gonzalez is on the
                                          right.

                                          Source: Navy.




                                          As a follow-on to the Arleigh Burke-class program, the Navy is evaluating
                                          concepts for a new generation of surface combatants—known as the 21st
                                          Century Surface Combatant—that is expected to provide the future fleet
                                          with the necessary capabilities and be built in sufficient quantities to




                                          Page 25                                               GAO/NSIAD-97-57 Navy Surface Combatants
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provide the required number of ships for overseas presence and
war-fighting missions. The Navy is conducting a two-phase cost and
operational effectiveness analysis, which is to be completed in 1997, to
recommend design alternatives for the new ship, or family of ships, and
will be followed later that year by a decision for approval to begin a new
acquisition program. A land-attack destroyer is planned as the first variant
in the new family of ships, whose primary missions will be to (1) support
the establishment of comprehensive battlespace dominance to protect
friendly forces from enemy attack and (2) influence events ashore through
the application of precision firepower. The Navy intends to begin building
the first ship around fiscal year 2003. The new ships will begin to enter the
fleet around fiscal year 2009, soon after which a significant number of
non-Aegis ships—the Oliver Hazard Perry-class frigates and the Spruance
and Kidd-class destroyers—will be retired from the force each year. A
full-capability cruiser variant is planned as a replacement for the earliest
Aegis-capable cruisers sometime after 2010.

Additionally, a new ship concept—the Arsenal Ship—is being developed
initially as a demonstration program to provide a large increase in the
amount of ordnance available to ground- and sea-based forces in a
conflict, particularly during the early days. The Navy envisions that the
ship would have a large capacity of different missiles, including
Tomahawk and Standard, and space for future extended range gun
systems. The ship could also have a sea-based version of the Army Tactical
Missile System. This ship could greatly increase capabilities in littoral
operations to conduct long-range strike missions, provide fire support for
ground forces, defend against theater ballistic missiles, and maintain air
superiority. The Navy envisions the ship to have a small crew (possibly
less than 50 members) and be highly survivable. The Navy and the Defense
Advanced Research Project Agency are jointly developing and funding the
program to allow the Navy to accelerate the ship’s development and
construction and be able to accept delivery of the first limited capability
ship for concept evaluation in October 2000.6 If the evaluation is
successful, the Navy plans to expand the mission capabilities of the
demonstration ship and construct three to five additional ships early in the
next decade.




6
 The Arsenal Ship Joint Program is managed by the Defense Advanced Research Projects Agency and
includes representatives from the Naval Sea Systems Command and the Office of Naval Research.



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                     We initiated a review of the Navy’s plans and assessments for the size,
Objectives, Scope,   mix, and capability of its future surface combatant force as part of our
and Methodology      ongoing examination of DOD’s planned force structure to support
                     peacetime, crisis, and war-fighting requirements. Specifically, we
                     determined (1) the basis for the Navy’s current and future force; (2) the
                     Navy’s plans to sustain the current force size into the next century; and
                     (3) the key factors that could affect future force requirements.

                     To examine the basis for the Navy’s current and planned surface
                     combatant force, we reviewed pertinent documentation, including policy
                     directives, planning guidance, strategies, threat assessments, operational
                     histories, statistics, and schedules, and studies and assessments on the
                     surface combatant force structure. We reviewed and conducted analyses
                     using the Navy’s force presence model to understand the various factors
                     that affect the required numbers of ships to achieve various overseas
                     presence levels, and we obtained and examined the Navy’s assessments of
                     surface combatant requirements for overseas presence. We also reviewed
                     several DOD and Navy studies, including the Naval Forward Presence
                     Report, Surface Combatant Force Level Study, and 21st Century Surface
                     Combatant Force Architecture Assessment, and the preliminary results of
                     the Navy’s Cost and Effectiveness Analysis for the 21st Century Surface
                     Combatant program to understand how assumptions on key operational
                     factors affect force size. In addition, we obtained and reviewed
                     information on new technologies and system improvements and
                     alternative operational concepts to identify possible effects on future
                     surface combatant requirements, capabilities, and operations.

                     To understand how the Navy is using its surface combatant force during
                     peacetime and crises, we discussed past and current naval operations with
                     U.S. Atlantic Fleet and U.S. Pacific Fleet officials. We also spoke with
                     officials of the U.S. Atlantic Command, U.S. Pacific Command, and U.S.
                     Central Command to obtain the joint perspective on Navy operations. Our
                     intent was to determine how naval operations may have changed as a
                     result of declining numbers, increasing unit capabilities, and littoral
                     warfare planning emphasis and whether any trends help to validate the
                     Navy’s assumptions for its future force. We obtained and examined
                     briefings on recent deployments of the Atlantic and Pacific Fleets’ carrier
                     battle groups to understand the role, use, and missions of their associated
                     surface combatants and determine how surface combatants are being used
                     in peacetime. We also obtained and reviewed briefings for deployments of
                     the Middle East Force surface action group, military exercises, and
                     counternarcotics operations. In addition, we visited three of the Navy’s



                     Page 27                                 GAO/NSIAD-97-57 Navy Surface Combatants
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newest surface combatants—an Aegis-capable Ticonderoga-class cruiser
and Arleigh Burke-class destroyer and an Oliver Hazard Perry-class guided
missile frigate—to discuss ship operations and capabilities with officers
and crew.

To determine the Navy’s ability to sustain its future surface combatant
force, we examined DOD’s Future Years Defense Program, budget
documents, congressional testimony statements, and current surface
combatant construction and force plans. To understand the long-term
sensitivity of ship construction rates and retirements on force size, we
spoke with Navy officials and obtained documentation on the issues and
key assumptions used in developing future force structure projections for
surface combatants. We developed a force projection model that we used
to conduct several analyses on the effects of different estimated service
lives and procurement profiles on sustaining force levels. To determine the
effect of different individual ship costs on future annual procurement
requirements and sustaining force levels, we conducted analyses using a
ship cost model and rough-order-of-magnitude cost estimates for future
ship concepts, which we obtained from the Navy. Additionally, we
reviewed surface combatant procurement and construction assumptions.
To assess the magnitude of competing funding requirements for several
major Navy, Marine Corps, Army, and Air Force procurement programs
over the next decade, we obtained and reviewed program and budget
documents and congressional testimony and discussed these requirements
with program officials. We also analyzed data from historical and current
defense programs and longer term procurement plans to determine future
funding patterns and requirements.

To establish a point-of-reference for our analysis and discussion of future
force levels in this report, we used the Navy’s surface combatant force
level at the end of fiscal year 1996 of 125 ships. This level is close to levels
used in recent defense planning guidance following DOD’s Bottom-Up
Review and is the lowest surface combatant level at any time during the
Cold War, in recent years, or for some time into the future. We use this
force level only as point of reference rather than as a verified or suggested
force size. In our projections of future force levels, we use the Navy’s
notional service life estimates, which the Navy uses in its current force
planning, to determine individual ship retirements. Additionally, in our
force level calculations, we include the future procurement of the new
21st Century Surface Combatant or subsequent ship at an annual
procurement rate of three ships, which is consistent with current rates for
the ongoing Arleigh Burke destroyer program. However, we did not



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    Introduction




    include the possible procurement of up to six Arsenal Ships because of the
    yet-unproven demonstration of the new ship concept. If procured, these
    ships, with significant ordnance capability, would add to surface
    combatant levels and the overall force capability beginning next decade.

    We contacted experts and academicians from both public and private
    organizations to obtain additional perspectives covered in our visits with
    U.S. military and defense officials. We performed work at the following
    locations:

    In the Washington, D.C., area

•   Office of the Secretary of Defense
•   Office of the Chairman, Joint Chiefs of Staff
•   Office of the Chief of Naval Operations
•   Surface Warfare Division, Deputy Chief of Naval Operations (Resources,
    Warfare Requirements, and Assessments)
•   Institute for Defense Analyses
•   Defense Intelligence Agency
•   Office of Naval Intelligence
•   Naval Sea Systems Command
•   Naval Surface Warfare Center, Dahlgren and Carderock Divisions
•   Commission on Roles and Missions of the Armed Forces
•   Applied Physics Laboratory, The Johns Hopkins University
•   Global Associates, Ltd.

    In the Norfolk, Virginia, area

•   U.S. Atlantic Command
•   U.S. Atlantic Fleet
•   Naval Surface Force, U.S. Atlantic Fleet
•   U.S.S. Vella Gulf (CG-72)
•   U.S.S. Stout (DDG-55)
•   U.S.S. Simpson (FFG-56)
•   Navy Doctrine Command




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    At MacDill Air Force Base, Florida

•   U.S. Central Command

    In the Honolulu, Hawaii, area

•   U.S. Pacific Command
•   U.S. Pacific Fleet

    In the San Diego, California, area

•   U.S. Third Fleet, U.S. Pacific Fleet
•   Naval Surface Force, U.S. Pacific Fleet

    We conducted our review from July 1994 to February 1997 in accordance
    with generally accepted government auditing standards.




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Chapter 2

Surface Combatant Program Is Not Clearly
Linked to the National Military Strategy

                      The basis for the Navy’s surface combatant program,1 as well as the
                      underlying assumptions, have not been clearly linked to the key elements
                      of the National Military Strategy. Although DOD’s 1993 Bottom-Up Review
                      concluded that a Navy comprised of 346 battle force ships would be
                      sufficient to carry out the strategy by fiscal year 1999,2 it did not specify a
                      force size for surface combatants. In subsequent congressional
                      presentations, DOD and the Navy indicated that between 120 and 126
                      surface combatants would be needed to meet national security objectives.
                      However, this figure was derived largely from budget-driven objectives
                      rather than an analysis of war-fighting, crisis response, and overseas
                      presence objectives. DOD’s current defense program supports a force of
                      131 surface combatants in fiscal year 2003 that is largely based on budget,
                      industrial base, and operational considerations. DOD has not yet
                      established a long-term surface combatant goal.


                      During the 1980s, the Navy pursued a 600-ship force goal as part of its
Revised Defense       maritime strategy to prepare for a global war against the former Soviet
Strategies Have       Union. This goal included 238 surface combatants. In August 1990, the
Reduced the Size of   President announced a shift in U.S. defense strategy from a Soviet threat
                      to major regional conflicts (MRC) against uncertain adversaries. The
the Surface           following year, DOD proposed a “base force” plan to reflect the new
Combatant Force       strategy that reduced the force structure to about 450 ships (including 150
                      surface combatants), which would be a sufficient level to counter a
                      possible reemergence of the Soviet threat.

                      In early 1993, DOD initiated a “bottom-up” review to examine the U.S.
                      defense strategy, force structure, modernization, foundations,
                      infrastructure, and resources needed in the post-Cold War era. Through
                      this review, DOD concluded that the United States should maintain
                      sufficient military power to be able to fight and win two MRCs that occur
                      nearly simultaneously.3 It also required U.S. forces to engage in
                      expeditionary operations, such as peace enforcement or crisis
                      intervention, and fulfill overseas presence missions. The review


                      1
                       According to DOD officials, the program plan for surface combatants reflects the current Future
                      Years Defense Program (for fiscal years 1998 through 2003) and internal planning for fiscal years
                      beyond the program showing anticipated procurements and retirements.
                      2
                       In addition to surface combatants, battle force ships include active and reserve aircraft carriers,
                      amphibious ships, strategic and attack submarines, patrol and mine warfare ships, and logistics ships.
                      At the end of fiscal year 1996, the Navy had 359 battle force ships.
                      3
                       For planning purposes, DOD defined nearly simultaneous to be a certain number of days between the
                      time that enemy forces mobilize in each conflict. The number of days is classified.



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                                         Linked to the National Military Strategy




                                         deemphasized the possibility of a reemerging Soviet threat and reduced
                                         U.S. forces to levels smaller than the earlier base force plan.

                                         The review concluded that a Navy comprised of 346 battle force ships, to
                                         be realized by fiscal year 1999, was sufficient to carry out U.S. strategy and
                                         meet national security requirements. The review stated a force size for
                                         aircraft carriers (12) and attack submarines (between 45 and 55) but did
                                         not state a specific number for surface combatants. In congressional
                                         presentations subsequent to the review, DOD and the Navy indicated that a
                                         force of between 110 and 116 active and about 10 reserve surface
                                         combatants would be needed. Navy officials told us that the force level of
                                         120 to 126 ships was derived from a budget reduction effort to reduce the
                                         base force goal for surface combatants by about 25 percent rather than an
                                         analysis of force structure requirements.

                                         DOD assessments and programming decisions after the review have
                                         modified the projected fleet size to between 330 and 346 battle force ships
                                         to provide flexibility for future programming decisions. DOD’s current
                                         Future Years Defense Program retains this goal for battle force ships and
                                         establishes a near-term program plan in fiscal year 2003 of 131 surface
                                         combatants (123 active and 8 reserve ships). Table 2.1 summarizes the
                                         surface combatant and battle force ship goals under various DOD force
                                         structure plans.


Table 2.1: DOD Force Structure Goals for Surface Combatants and Battle Force Ships
                                   Cold War                                      Post-Cold War


DOD plan                        The Maritime Strategy              Base Force            Bottom-Up Review          Current program plan
Date of plan                                   FY 1988                 FY 1991                      FY 1993                      FY 1998
                                                                                                             a
Number of surface                                  238                      150                                                       131b
combatants
Total number of                                    600              About 450                            346                     330-346
battle force ships
Goal achievement date                        Mid-1990s                 FY 1995                      FY 1999                      FY 2003
                                         Note: Numbers include both active and reserve ships.
                                         a
                                          Although a goal was not specified by the Bottom-Up Review, DOD planning guidance in 1994
                                         showed a force of between 120 and 126 surface combatants.
                                         b
                                          This number of surface combatants reflects the programmed force level in fiscal year 2003. DOD
                                         has not established a surface combatant force goal.

                                         Source: Our analysis of DOD and Navy data.




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                         Linked to the National Military Strategy




                         In commenting on our report, DOD officials told us that a long-term surface
                         combatant goal has not yet been established and that the current program
                         plan is largely based on budget, industrial base, and operational
                         considerations. The officials noted that a goal and its basis was under
                         review as part of DOD’s 1997 Quadrennial Defense Review and the Navy’s
                         assessment for the follow-on surface combatant class to the Arleigh Burke
                         destroyer, the 21st Century Surface Combatant.


                         Current U.S. military strategy requires that the military be prepared to
Current Strategy Calls   fight and decisively win two nearly simultaneous MRCs.4 However, the
for Fighting Two         strategy specifies a number for aircraft carriers and attack submarines but
Conflicts                not a particular surface combatant force size for carrying out this strategy.
                         DOD believes that two nearly simultaneous MRCs will be the most stressing
                         situation the U.S. military will face in the future. The strategy currently
                         envisions that the MRCs would be a conflict similar to the 1991 Persian Gulf
                         War and a conflict potentially in Korea. DOD considers the timing and
                         location of these conflicts to be uncertain and believes that most required
                         U.S. forces would not be in those areas before the outbreak of the conflict.
                         Therefore, forces already in the area, such as naval forces conducting
                         overseas presence, would provide critical capabilities in the early days of
                         the conflict. Current strategy also states that, although planning for the
                         regional conflicts should include the contributions of U.S. allies, the U.S.
                         military should be sized and structured to act unilaterally if necessary.

                         The only recent example of surface combatants being used for
                         war-fighting roles in an MRC is the 1991 Persian Gulf War. Surface
                         combatants were used to conduct several sea control and power
                         projection missions, which included protecting maritime traffic,
                         performing maritime intercept operations of contraband shipping to sever
                         Iraqi trade, conducting deep-strike Tomahawk missile attacks against Iraq,
                         and providing combat search and rescue operations in the region. On
                         January 17, 1991, the first day of the war, the Navy had 30 surface
                         combatants—14 cruisers, 10 destroyers, and 6 frigates—deployed in the
                         region. Among the 30 ships, 14 had a capability to launch Tomahawk
                         missiles, and 9 ships were equipped with Aegis, including 7 of the
                         Tomahawk-capable ships.



                         4
                          Current U.S. military strategy also requires the military to be able to (1) deploy or station forces
                         abroad in peacetime to shape the international security environment in favorable ways; (2) conduct a
                         wide range of contingency, or crisis, operations to intervene when U.S. interests are threatened; and
                         (3) prevent and defend against the use of nuclear, biological, or chemical weapons.



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    The specific circumstances of the two envisioned MRCs would significantly
    affect the number of ships the Navy might use. According to current
    strategy documents, the Navy envisions a greater emphasis on fighting in
    littoral areas in the future. The Navy also envisions that surface
    combatants will (1) conduct battlespace dominance missions against air,
    surface, and undersea threats to make the area safe for joint force
    operations; (2) perform power projection missions to provide strategic
    strike and naval surface fire support capabilities in support of the joint
    land and air campaigns; and (3) provide joint forces with command,
    control, information, and surveillance support. Specifically, surface
    combatants would

•   support and defend carrier battle groups, amphibious task forces, and
    mine countermeasure ship operations;
•   provide defense against enemy theater ballistic missile attacks;
•   fire missiles and guns against enemy units ashore;
•   protect maritime and air traffic;
•   collect intelligence information; and
•   interdict enemy maritime shipping.

    The Navy has not said how this shift in strategy to fighting in littoral areas
    would affect the size of its surface combatant fleet. However, it believes
    that the postulated threats and probable roles and missions assigned to its
    surface combatants require that the force consist of a large number of
    Aegis-capable ships. These ships can perform several simultaneous tasks
    more effectively than the non-Aegis-capable ships and operate
    independently in high-threat areas. The Navy envisions using its
    non-Aegis-capable ships for maritime intercept operations; protection of
    sea and air routes; and battlespace dominance missions, including
    protection of carrier and amphibious forces. It also expects allies to
    provide a limited number of less capable ships that would help to offset
    requirements for similar U.S. ships.5




    5
     According to the Navy’s August 1995 Surface Combatant Force Level Study, draft Navy MRC scenario
    plans anticipate that the Japanese Maritime Self-Defense Force would provide surface combatants for
    protection of sea lanes and defense of their homeland in an MRC in the northwest Pacific Ocean.
    Additionally, the United Kingdom, France, Australia, New Zealand, and Canada may support the
    United States in future MRCs with less capable destroyers and frigates than the U.S. Navy’s
    Aegis-capable ships.



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                      Linked to the National Military Strategy




                      Forward deployed ships help the Navy meet the U.S. military requirement
Forward Deployed      to be able to respond rapidly to crises. The extent and location of surface
Ships Help Satisfy    combatant and battle force ship deployments are based on the need to
Crisis Response and   provide deterrence, respond to crises, and maintain a presence overseas.6

Presence Mandates     Crisis and contingency missions for surface combatants include maritime
                      intercept operations to enforce sanctions, humanitarian relief, air
                      surveillance and air control, protection of U.S. forces, and strike
                      operations. For example, in support of ongoing NATO peacekeeping
                      operations in the former Republic of Yugoslavia, a Ticonderoga-class
                      Aegis cruiser, the U.S.S. Normandy, made a high-speed transit in
                      September 1995 from the Strait of Gibraltar to the Adriatic Sea and then
                      fired several Tomahawk missiles against Bosnian Serb military targets.
                      Another Ticonderoga-class cruiser, the U.S.S. Monterey, left the Central
                      Command’s area of responsibility in December 1995 and accompanied the
                      aircraft carrier U.S.S. America to the Adriatic Sea to support NATO force
                      deployments into Bosnia.7

                      Figure 2.1 shows an Aegis-capable cruiser conducting maritime
                      interception operations to enforce U.N. sanctions against Iraq in the
                      Arabian Gulf during December 1996.




                      6
                       During peacetime, the Chairman of the Joint Chiefs of Staff, service chiefs, and chiefs of the five
                      unified commands establish long-range planning guidance for the location and number of U.S. naval
                      forces assigned to all regions on a fair-share basis. This scheduling guidance—Global Naval Force
                      Presence Policy—can be adjusted, as necessary, to meet unexpected contingencies. This policy results
                      in planned gaps in various theaters, particularly in the Mediterranean Sea and Indian Ocean.
                      7
                       The Central Command is one of five unified U.S. commands. The other four are the Atlantic,
                      European, Southern, and Pacific Commands. The commands are composed of forces from two or
                      more of the military services. The commanders in chief of these commands are responsible for all
                      operations within their designated geographic areas.



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Figure 2.1: U.S.S. Valley Forge Aegis Cruiser Stops and Interrogates a Merchant Ship Crew Suspected of Violating
Sanctions Against Iraq




                                          Note: Maritime interception operations to enforce sanctions or monitor drug traffic into the United
                                          States is an increasingly important mission for surface combatants in recent years.

                                          Source: Navy.




                                          The Navy believes that surface combatants and other forward deployed
                                          forces will be important early in a conflict. Surface combatants can
                                          provide protection of sea and air routes, ports, coastal airfields, and
                                          facilities and substantial command, control, and communications
                                          capabilities. The Navy also believes that surface combatant forces will
                                          provide initial capabilities until additional forces arrive in the area.



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                        Forward-deployed surface combatants could be available to immediately
                        strike targets on land with Tomahawk cruise missiles and provide naval
                        fire support for ground forces. In the future, they are also expected to
                        provide defense against ballistic missiles. A 1995 Navy surface combatant
                        study concluded that defense against theater ballistic missile and
                        Tomahawk strikes will be a high-priority task of Aegis-capable ships early
                        in an MRC.


                        In addition to providing a means to respond rapidly to a crisis, the Navy
Forward Presence Is a   forward deploys ships to carry out other U.S. strategic objectives, such as
Key Component of        providing stability and deterrence. Surface combatants and other naval
Defense Strategy        forces, including aircraft carriers, amphibious ships, and attack
                        submarines, routinely deploy to maintain U.S. presence throughout the
                        world. At any given time, the Navy has about one-fifth of its surface
                        combatant force deployed overseas to conduct a variety of overseas
                        presence missions.

                        Surface combatants conduct a wide range of presence missions and tasks,
                        such as making protocol visits in foreign ports and conducting regional,
                        bilateral, and multilateral training exercises to enhance diplomacy and
                        improve interoperability among allies. In recent years, these ships have
                        provided substantial contributions to U.S. counternarcotics operations
                        around Central and South America by conducting surveillance and
                        interception missions.

                        Surface combatants can deploy with an aircraft carrier as part of a carrier
                        battle group, with several other combatants as a surface action group, or
                        independently. The number of surface combatants needed to carry out
                        such operations depends on the types of deployments that DOD elects to
                        use. Figure 2.2 shows the operating areas, deployment types, and activities
                        for surface combatants during peacetime.




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Figure 2.2: Peacetime Presence Operations of Surface Combatants




             E                     E                          B
                                                                                                 C
                                                                           A
                               D

                                                                                                       C

                           D                                                     C


                                         D




  Map location         Unified                 Area                 Types of operations           Number of surface
                      command                                                                    combatants deployed
                                                                                                   or underway on
                                                                                                     Feb. 3,1997
        A              Central         Red Sea and Arabian        Carrier battle group and             9 deployed
                      Command          Gulf                       surface action group
                                                                  deployments
        B             European         Mediterranean and          Carrier battle group and             6 deployed
                      Command          Adriatic Seas              independent deployments
       C               Pacfic          Pacific and                Carrier battle group and            10 deployed
                      Command          Indian Oceans              independent deployments
                                                                  and training
       D              Southern         Caribbean Sea and          Counternarcotics and                 6 deployed
                      Command          Pacific and Atlantic       independent deployments
                                       Oceans near South
                                       America
        E            Pacific and       Pacific and                Battle group and                    20 underway
                      Atlantic         Atlantic Oceans near       independent training
                     Commands          the United States


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Source: Navy.




Currently, the majority of surface combatants deploy as part of carrier
battle groups for routine 6-month deployments to the Mediterranean Sea,
western Pacific Ocean, and North Arabian Sea. As a major element of a
carrier battle group, surface combatants provide the primary defensive
capabilities for the group and contribute significant strike and fire support
for joint operations ashore. Navy officials stated that one or more surface
combatants are necessary at all times to escort and protect the aircraft
carrier. Without them, an aircraft carrier could not safely deploy. Although
the Navy has emphasized using its surface combatants more
independently, they are still inherently linked to carrier force structure
and deployments.

The Navy’s notional carrier battle group has six surface combatants, an
aircraft carrier and its airwing,8 two nuclear attack submarines, and a fast
combat support (logistics) ship. This notional configuration is considered
to have the necessary capabilities to provide an initial crisis response from
a forward posture. However, the actual number and type of ships
assembled for each deployment will depend on the available assets,
surface combatants already in area, and the needs of the joint unified
commands. As shown in table 2.2, recent Atlantic Fleet carrier battle
groups generally deployed with the Navy’s notional configuration and
corresponding capabilities, whereas recent Pacific fleet deployments were
configured with fewer ships and embarked helicopters than the notional
configuration. Appendix I summarizes the roles, missions, and specific
tasks of surface combatants as part of the deployments of seven carrier
battle groups from the Atlantic and Pacific Fleets between May 1994 and
February 1996.




8
 A carrier air wing includes fighter, attack, electronic countermeasures, antisubmarine, refueling,
search and rescue, special warfare support, and surveillance aircraft.



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Table 2.2: Surface Combatants in the Navy’s Notional Configuration and Recent Atlantic and Pacific Fleet
Carrier Battle Groups
                                                                       Number of surface combatants with
                                                      Total number                 capability                                   Number of
                                                         of surface            Aegis                                            embarked
                                                      combatants in           combat                        Tomahawk           helicopters
Carrier battle group configuration                           group            system            VLS     cruise missilea       among ships
Navy notional                                                        6               3              4                   4              10
Atlantic Fleetb                                                      6            2-3             2-5                 2-5              7-9
Pacific Fleetc                                                     3-4            1-2             1-3                 1-3              4-8
                                         a
                                          Some groups included Virginia-class cruisers, which do not have VLS but can launch
                                         Tomahawks with their armored box launcher systems.
                                         b
                                          These figures are based on five sequential Atlantic Fleet carrier battle group deployments
                                         between May 1994 and July 1996.
                                         c
                                          These figures are based on five sequential Pacific Fleet carrier battle group deployments
                                         between June 1994 and May 1996.

                                         Source: Our analysis of Navy data.



                                         Surface combatants can also be deployed without a carrier either
                                         independently or as part of a surface action group. A surface action group
                                         generally consists of two or more surface combatants and deploys for
                                         unique operations, such as augmenting military coverage in world regions,
                                         providing humanitarian assistance, and conducting exercises with allied
                                         forces.

                                         Several operational factors also affect how the surface combatant forces
                                         are employed. For example, routine maintenance and long-term overhaul
                                         requirements render about 10 percent of the force unavailable for
                                         deployment at any given time. Appendix II discusses various operational
                                         factors and their affect on the Navy’s management of its surface
                                         combatant fleet.


                                         DOD and Navy studies illustrate that the size force needed to meet Navy
Force Size Varies                        presence and war-fighting requirements is highly dependent on the
Widely Based on                          assumptions made. For example, in its August 1994 assessment, Naval
Assumptions                              Forward Presence Report, DOD analyzed peacetime presence options for
                                         naval forces to meet the five unified commands’ unconstrained
                                         requirements for naval presence. It concluded that the unified commands’
                                         naval force requirements generally exceeded the levels of available assets.




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The report stated that “. . . the totality of this set of all-encompassing
requirements is beyond what could be reasonably covered by naval forces
alone, it is a representation of the broad scope of presence missions
confronting the theater commander” and that “. . . any exercise in
determining alternative force structures must necessarily account for
other service contributions . . . .”

The assessment also stated that the most important overseas presence
requirements can be met through a range of measures, including “tethers”,9
 other service forces, and greater acceptance of periodic presence in some
cases. Further, the assessment indicated that alternative naval force
groups, consisting of various combinations of surface combatants,
submarines, and land-based aircraft, can perform certain naval presence
tasks when an aircraft carrier and its airwing are unavailable.10

Changing assumptions, such as operating tempo, availabilities, and
originating ports and destinations, can also alter conclusions about force
requirements. The Navy has periodically assessed naval force
requirements using a model to calculate the total force necessary to meet
the unified commands’ presence requirements for given assumptions and
inputs. Altering key assumptions has yielded total force estimates that
ranged from 126 to 144 surface combatants. For example, the Navy’s most
recent analysis concludes that 126 surface combatants can meet current
unified commands’ presence requirements. The lower estimate results
from several changes to inputs in the model, such as (1) basing distances
used in the model on the location of recent naval engagements,
(2) redefining the number of months between deployments, and
(3) changing the origin of ships to deployed areas.11 These changes
improve the overall efficiency and availability of ships to deploy and

9
 Tether refers to the practice of maintaining ships at acceptable distances away from a specific area of
presence operations while allowing them to return within a specified number of days. The tethered
presence policy is a Chairman, Joint Chiefs of Staff, and DOD policy that is supported by funding in the
fiscal year 1998 budget and the Future Years Defense Program for fiscal years 1998 through 2003. This
policy results in lower force level requirements than those needed to support continuous presence in
all three major regions.
10
  In our reports, Navy Carrier Battle Groups: The Structure and Affordability of the Future Force
(GAO/NSIAD-93-74, Feb. 25, 1993) and Cruise Missiles: Proven Capability Should Affect Aircraft and
Force Structure Requirements (GAO/NSIAD-95-116, Apr. 20, 1995), we suggested that DOD consider
relying more on groups comprised of surface combatants, particularly those equipped with cruise
missiles, for some presence and crisis missions to reduce aircraft carrier requirements.
11
  The Navy revised the origin of surface combatants assigned to the Middle East Force in the Central
Command’s area of responsibility to achieve a more efficient forward presence rotation of ships.
Instead of assigning all five ships from San Diego, California, the Navy began sending three from
Norfolk, Virginia; one from Pearl Harbor, Hawaii; and one from San Diego. By reducing the distance
for some ships, the overall number of ships needed to support the forward presence is reduced.



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results in an overall reduction in the number of ships required to maintain
a given level of presence. More recently, DOD analyses for the ongoing
quadrennial defense review show that tethered presence requires about
110 surface combatants, including 16 ships assigned to the Western
Hemisphere group and 10 with similar missions on the West Coast of the
United States, to support operations, such as counternarcotics, in other
areas. DOD considers this force to be adequate to meet the apportionment
of forces required by the commanders in chief for the current two nearly
simultaneous MRC strategy.

Similarly, the Navy’s Surface Warfare Division’s August 1995 Surface
Combatant Force Level Study concluded that 165 cruisers, destroyers, and
frigates would be needed through 2010 to meet war-fighting requirements
of two nearly simultaneous MRCs. According to the study, however, this
number could be reduced to 145 ships, including 10 reserve frigates, with
use of allied surface combatants. Subsequently, a related study, 21st
Century Surface Combatant Force Architecture Assessment, completed in
February 1996 by the Naval Surface Warfare Center, suggested that the
surface combatant force level from 2010 to 2030 could be even smaller
than the 145-ship force recommended by the earlier study because
(1) better weapon systems could permit some operations to be more
effective or allow a ship to operate in safer waters farther from shore;
(2) new classes of surface combatants might provide a more tailored mix
of capability to fight littoral warfare; and (3) deployment strategies, when
used with the new classes, would reduce current peacetime deployment
ratios, thereby increasing ship availabilities. The study concluded that
peacetime and wartime requirements can be satisfied after 2010 with new
ship classes and the use of innovative forward presence concepts.

Neither DOD nor the Navy has endorsed the findings and conclusions of
either of the Navy’s studies. However, these studies, as well as others, are
being used by the Navy’s cost and effectiveness analysis group in its
evaluations of concepts and force requirements for the 21st Century
Surface Combatant.




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                      The Navy can sustain its current surface combatant force size of at least
                      125 ships through 2013 by completing its 57-ship Arleigh Burke-class
                      destroyer program, building the new 21st Century Surface Combatant, and
                      retaining ships for their expected service lives. If the Navy builds 3 ships
                      each year for the 21st Century Surface Combatant program—the same as
                      its recent average rate for the Arleigh Burke program—the force will fall
                      below 125 ships after 2013 and remain at lower levels for the remainder of
                      the decade. The lower force levels result from the large number of
                      retirements occurring during this time. By 2020, the Navy will have about
                      115 surface combatants. The Navy would have to build 4 to 5 ships each
                      year after completion of the Arleigh Burke program to sustain a force of at
                      least 125 surface combatants through 2020.

                      Sustaining a force of at least 125 ships to 2013 depends on the Navy’s
                      ability to keep surface combatants longer than it has in the past. Cruisers
                      and destroyers have historically been retired from the force by 30 years
                      and frigates by 22 years. However, the Navy plans to retain most of its
                      current cruisers and all of its destroyers for 35 years and most of its
                      frigates retiring after fiscal year 1999 for 24 to 32 years. The Navy believes
                      this plan is feasible because of the use of less maintenance-intensive gas
                      turbine propulsion systems, rather than steam, and modular, highly
                      computerized weapon systems on some ships, permitting relatively easy
                      and cost-effective upgrades.

                      Unless the next new combatant class is less costly than the Arleigh
                      Burke-class destroyer, which currently costs about $870 million per ship,1
                      increasing the number of ships built annually may be difficult over the
                      long term because of competition for funding from several other Navy
                      ship, aircraft, and weapon modernization programs as well as other
                      services’ programs.


                      The Navy’s current shipbuilding plan through fiscal year 2003 supports
Ship Retirements      continued procurement of the Arleigh Burke-class destroyer and the
Could Affect Future   introduction of the 21st Century Surface Combatant. The Navy is
Surface Combatant     procuring about three Arleigh Burke-class destroyers annually, with
                      construction taking about 5 years before the ship is delivered to the force.
Requirements          The Navy believes that this rate is the minimum needed to ensure that the
                      shipbuilding industry makes the necessary investment and manages its


                      1
                       The $870 million figure is based on procurement of four Arleigh Burke-class destroyers in fiscal
                      year 1997. The cost varies with the number of ships built each year and the changes made to the ship’s
                      design in that year’s procurement.



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                                                overhead to reduce Navy program costs.2 The Navy plans to begin building
                                                the first 21st Century Surface Combatant in fiscal year 2003. Table 3.1
                                                shows the Navy’s current shipbuilding plan for surface combatants
                                                through fiscal year 2003, including expected delivery dates and resulting
                                                force levels. The Navy plans to procure the remaining four Arleigh
                                                Burke-class destroyers in fiscal years 2004 and 2005, with the last ship
                                                being delivered to the fleet around fiscal year 2010. However, DOD
                                                indicates that the results of the soon-to-be-completed 21st Century Surface
                                                Combatant cost and operational effectiveness analysis could change the
                                                total number of Arleigh Burke-class destroyers to be procured.


Table 3.1: Navy’s Shipbuilding Plan for Surface Combatants
                                                                                                          Fiscal year
                                                                            1996      1997      1998       1999      2000      2001      2002     2003
Number of Arleigh Burke-class destroyers                                        2         4          3         3         3           3      1         2
Number of 21st Century Surface Combatants                                       0         0          0         0         0           0      0         1a
                           b
Number of other new ships                                                       3         2          1         2         2           3      4         3
Total new construction ships                                                    5         6          4         5         5           6      5         6
Approximate fiscal year of delivery for new destroyers                      2001      2002      2003       2004      2005      2006      2007     2008
Surface combatant force level after deliveryc                                126        130       131       133        136       140      137       135
                                                a
                                                The first 21st Century Surface Combatant is planned to be delivered during fiscal year 2008 but
                                                will not achieve initial operating capability in the fleet until fiscal year 2009.
                                                b
                                                 Other new ships in fiscal years 1996 and 1997 included an SSN-21 class attack submarine, an
                                                LHD-1 class amphibious assault ship, an LPD-17 class amphibious transport dock ship, and two
                                                oceanographic ships. In fiscal years 1998 through 2003, the plan includes another Nimitz-class
                                                nuclear aircraft carrier, four New Attack Submarines, nine LPD-17 class amphibious transport
                                                dock ships, and one fast combat support ship. This plan does not reflect possible procurements
                                                of Arsenal Ships, which may occur during this period.
                                                c
                                                    Force levels reflect retirements based on current Navy notional service lives.

                                                Source: Our analysis of Navy data.



                                                Sustaining a surface combatant force of at least 125 ships beyond the end
                                                of the next decade will become increasingly difficult for the Navy because
                                                a large number of surface combatant retirements will begin around that
                                                time. According to our estimates, the Navy will retire about 75 of its
                                                surface combatants between fiscal year 2000 and 2020. However, the
                                                majority of these retirements—55 ships—will occur between fiscal year
                                                2011 and 2018. The ships retiring during this 8-year period represent the

                                                2
                                                 Two private shipbuilding contractors currently build Arleigh Burke-class destroyers: Bath Iron Works
                                                Corporation in Bath, Maine, and Ingalls Shipbuilding, Inc., in Pascagoula, Mississippi. Both contractors
                                                have significant design, construction, and combat systems integration capabilities.



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                                          last of the Navy’s current non-Aegis ships—the Oliver Hazard Perry-class
                                          frigates and the Spruance- and Kidd-class destroyers. Figure 3.1 shows the
                                          approximate number of surface combatants that are to be retired each
                                          year between fiscal year 2000 and 2020.



Figure 3.1: Projected Surface Combatant Retirements From Fiscal Year 2000 to 2020

Number of ships
12



10



  8



  6



  4



  2



  0
       00        02        04       06         08       10      12                 14    16        18        20
                                                    Fiscal year

                                         Cruiser        Destroyer              Frigate


                                          Source: Our analysis of Navy data.




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                                             The Navy’s ability to achieve and sustain a desired force size is affected by
                                             the following three major factors:

                                         •   the service lives of existing ships (the length of time between a ship’s
                                             commissioning and retirement), which determine when ships need to be
                                             replaced if the force level is to be sustained;
                                         •   the cost of new ships, which is determined largely by the capabilities of
                                             those ships; and
                                         •   the funds Congress makes available to construct new ships, which
                                             ultimately determines whether the required ships can be built.

                                             Ultimately, the Navy must achieve a balance among ship retirements, new
                                             ship cost, and the likely available funding to enable it to build ships with
                                             the necessary capabilities and in sufficient numbers to sustain the desired
                                             force. Figure 3.2 shows how these factors affect the Navy’s ability to
                                             sustain a particular surface combatant force level.


Figure 3.2: Major Factors That Sustain
the Surface Combatant Force

                                                                                Average annual procurement
                                                                              funding available for combatants                    Average
                                                 Force level to              ___________________________
                                                                     =                                                   X      service life of
                                                 be sustained
                                                                              Average cost of a new combatant                   current force


                                                                           <--Average annual construction rate-->


                                             Source: Navy.




                                             If the average service life of the current force is 35 years and the cost of
                                             new ships being built is $900 million, for example, the Navy would need
                                             average annual procurement funding for surface combatants of about
                                             $3.2 billion each year to sustain a 125-ship force level. By contrast, if the
                                             Navy plans to sustain a larger force, such as a 138-ship force, it would need
                                             about $3.6 billion each year to support ship construction.3


                                             3
                                              The “average annual procurement funding available for combatants” divided by the “average cost of a
                                             new combatant” results in the average annual construction rate necessary to support the force level. In
                                             the given examples, the formula would yield a hypothetical average of 3.6 and 3.9 ships each year,
                                             respectively.



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                  DOD believes this calculation assumes a steady-state construction rate, that
                  is, ships leave the force at the same rate they arrive. As a result, DOD
                  believes the calculation provides only a rough estimate for force size
                  planning and is applicable only if the force objective remains constant
                  throughout the service life assumed, which has never occurred
                  historically. However, our intent in using this calculation is to show the
                  dynamics, and the resulting difficulties, of sustaining ship force levels.


                  Determining the useful service lives of ships is a major factor in planning
Retaining Ships   and budgeting for future force levels. The estimates of expected service
Longer Helps to   lives are used to help determine the rate at which new ships must be
Mitigate New      acquired to sustain a given force size. The longer the Navy retains ships in
                  its force means the longer it can delay replacing those ships. However, if
Construction      ships are retired earlier than anticipated, the Navy must adjust its
Requirements      shipbuilding plan and budget to sustain desired force levels. Due to the
                  length of time required to construct modern combatants—about
                  5 years—early retirements must be identified as soon as possible to make
                  the needed adjustments.

                  Navy cruisers, destroyers, and frigates have historically been retired by
                  30 years, although recent deactivations have occurred earlier than planned
                  as the force was downsized since the end of the Cold War. For its
                  August 1995 Surface Combatant Force Level Study, the Navy analyzed the
                  actual service lives of surface combatants constructed since World War II
                  and found that most ships were retired before 30 years (frigates were
                  retired at around 22 years). In particular, the study noted that lives were
                  significantly shorter for ships that were not upgraded with new combat
                  systems or had significant maintenance problems associated with their
                  steam engineering systems. For example, combat systems for cruisers,
                  which usually have the most demanding missions, became obsolete in
                  about 12 to 16 years unless they were extensively modernized to meet
                  projected threats. When the combat systems were upgraded and the ships
                  were modernized, the ships served up to 30 years. Table 3.2 shows the
                  historical service lives of ships built after World War II. In informal written
                  comments to the report, DOD noted that the historical data was somewhat
                  distorted because of earlier-than-planned retirements of some ships,
                  particularly frigates, since 1990.




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Table 3.2: Historical Service Lives for
Navy Surface Combatants Built After       Figures in years
World War II                              Ship type                                                Ship as built          Ship with upgrades
                                          Cruiser                                                           14-22                           27-30
                                          Destroyer                                                         15-20                           29-30
                                                                                                                                                   a
                                          Frigate                                                           21-22
                                          Note: Historical service lives are based on actual retirements for ships that were built after the end
                                          of World War II.
                                          a
                                           Frigates that were built as single-purpose antisubmarine warfare escorts have become obsolete
                                          in 21 to 22 years. Weight and size limitations have precluded easy modernization, and
                                          nonredundant engineering plants have limited survivability in combat.

                                          Source: Navy.



                                          The Navy noted that, on the basis of historical service lives, notional
                                          estimates for surface combatants cannot be realized without
                                          modernization and upgrades to the ships and their combat systems. When
                                          modernized, some ships may exceed the current estimates. The Navy
                                          specifically identified most of the Ticonderoga-class cruisers as possible
                                          candidates for life-extending upgrades. It also noted that, even though
                                          combat systems are becoming obsolete faster as the threat becomes more
                                          rapidly adaptive, the use of modular, software-based combat systems will
                                          permit more frequent cost-effective upgrades to maximize service lives in
                                          the future. Additionally, the use of gas turbine propulsion systems may
                                          allow opportunities for longer service lives because of their lower and less
                                          costly maintenance requirements than previous steam systems.

                                          Due in large part to the design and construction of modern surface
                                          combatants, the Navy plans to keep most current ships longer than
                                          previous ships. In recent force planning for ships, the Navy uses notional
                                          estimated service lives of 35 years for Aegis-capable cruisers and all
                                          current classes of destroyers and 24- to 32-year service lives for 28 of the
                                          35 Oliver Hazard Perry-class frigates retiring after fiscal year 1999.
                                          According to Navy officials, these service life estimates are primarily
                                          based on the number of years the ship’s structure, which includes its hull,
                                          mechanical, and electrical systems, is reasonably expected to last without
                                          incurring significant repair and modification costs. In the case of frigates,
                                          however, the Navy has recently added combat system capability as a
                                          factor in its estimates. Unlike prior classes of frigates, the Navy has been
                                          able to make some modernization upgrades to the Oliver Hazard
                                          Perry-class frigates to extend their lives. Twelve frigates that have had the
                                          most extensive modifications to their combat systems are currently




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                                expected to remain in the force for 29 to 32 years. Another 18 that have
                                had significant modernization are planned to average about 25 years of
                                service life. In contrast, seven frigates in the force after fiscal year 1999
                                that are largely unmodernized are being retired early as new Arleigh
                                Burke-class destroyers enter the force. As a result, current plans show
                                these frigates having an average service life of about 17 years.

                                The notional estimated service lives used in recent Navy planning also
                                differ from the current officially approved ship service life estimates. The
                                official estimates for current surface combatants are 40 years for
                                Aegis-capable cruisers and all classes of destroyers and 35 years for
                                frigates. These estimates are substantially longer than historical lives and
                                reflect the original engineering design lives. Navy officials have stated that
                                the official estimates are misleading for planning purposes because of the
                                difficulty and expense of maintaining ships beyond 35 years. At that point
                                in the ship’s life, it is often more economical and militarily sound to
                                replace the ship. The Navy is currently reviewing its official service life
                                estimates and anticipates that new service estimates, similar to the
                                notional estimates, will be approved soon.

                                For our analyses, we use the notional estimated service lives that the Navy
                                has used in its recent force planning for surface combatants.4 These lives
                                are as follows:

                            •   Aegis-capable cruisers, 35 years;
                            •   nuclear-powered cruisers, 17 to 29 years;
                            •   destroyers, 35 years;
                            •   frigates with significant modernization, generally 24 to 32 years; and
                            •   frigates without significant modernization, an average of about 17 years.


Service Life Assumptions        The length of estimated service life used for ships in the force has a
Affect Future Force Plans       significant effect on the number of ships to be built each year to sustain a
                                given force level. To illustrate this effect, we examined three different
                                service life assumptions for ships to be retired after fiscal year 1999:

                            •   historical service lives based on actual retirements of surface combatants
                                built since World War II (cruisers and destroyers, 30 years; frigates,
                                22 years),

                                4
                                 Notional estimated service lives are used for all force level projections in this report unless otherwise
                                noted. The actual service life of a surface combatant, however, may vary somewhat from the estimated
                                life depending on the ship’s unique configuration, modernization, operational history, and cost
                                considerations.



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•   notional estimates used in recent Navy force structure planning, and
•   officially approved service life estimates based on projected lives of recent
    ship classes as designed (cruisers and destroyers, 40 years; frigates,
    35 years).

    Our analysis assumed implementation of the current Arleigh Burke-class
    construction plan and that the lead ship for the 21st Century Surface
    Combatant will be procured in fiscal year 2003. Follow-on construction of
    that ship and other future surface combatants was assumed to proceed at
    a rate of three ships annually beginning in fiscal year 2005. This projected
    construction rate for future surface combatants is consistent with the
    current construction profile for Arleigh Burke-class destroyers. Figure 3.3
    shows the force levels achieved for each of the three service life
    assumptions.




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Figure 3.3: Projected Surface Combatant Force Levels Achieved at Various Service Life Estimates

Number of ships
200




150

                                                                                          125

100




 50




   0
       00     02      04     06      08       10      12        14       16     18   20
                                          Fiscal year

                              Currently
                                        Notional Historical
                              approved


                                           Source: Our analysis of Navy data.




                                           If ships are retired close to historical averages, the force will fall
                                           significantly below 125 ships beginning about 2007. Keeping ships for the
                                           currently approved estimates actually increases the size of the force
                                           through 2014 before leveling off and then declining sharply to 128 ships in
                                           2020. The principal reason for the higher force levels achieved with the
                                           currently approved estimates is the significantly longer lives assumed for
                                           the frigates than the other two service life assumptions.




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                       If ships are retired at the Navy’s current notional estimates, the force will
                       decline below 125 ships in 2014. After that, the Navy could sustain a force
                       of between 111 to 117 surface combatants through 2020 and as long as
                       2029, assuming continued procurement of 3 ships each year.5 However, to
                       sustain a force of at least 125 ships through 2020, the Navy would need to
                       increase the average rate to slightly more than 4.5 ships each year for
                       9 years beginning in 2005 before returning to a 3-ship annual rate in 2014.
                       Therefore, the construction program for the next surface combatant
                       class—the 21st Century Surface Combatant—depends on the Navy’s
                       ability to retain its current surface combatants longer than historical
                       experience. Otherwise, the Navy will need to replace ships earlier than
                       anticipated to sustain its desired force size or accept a smaller force level.


                       The cost of new surface combatants is a large share of the Navy’s annual
Navy May Have          ship and overall procurement funding. Between fiscal year 1990 and 1996,
Difficulty Financing   the Navy allocated about 44 percent of its annual funding for ship
Its Shipbuilding       construction and conversion to surface combatants and about 14 percent
                       of its overall annual procurement funding.
Program
                       Funding for surface combatants remains a high priority in recent Navy
                       budgets and through the end of the current defense program. Congress
                       appropriated $3.6 billion for construction of 4 new destroyers in fiscal
                       year 1997 and gave the Navy authority to procure a total of 12 destroyers
                       in fiscal years 1998 through 2001 using a multiyear acquisition strategy. In
                       its biennial budget submission for fiscal years 1998 and 1999, the Navy is
                       requesting about $2.8 billion and $2.7 billion, respectively, for a total
                       procurement of six destroyers. Table 3.3 compares recent annual funding
                       for Arleigh Burke-class destroyers, other Navy ships, and overall Navy
                       procurement for fiscal years 1995 through 1999.




                       5
                        If future surface combatants are procured at 3 ships each year and retained for 35 years, the force
                       eventually reaches a steady-state level of 105 ships around 2032. Therefore, surface combatants would
                       be replaced on a one-for-one basis with new ships.



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Table 3.3: Recent Annual Funding for Surface Combatants, Other Ships, and Overall Navy Procurement
Then-year dollars in billions
                                                                                                   Fiscal year
                                                                                                  1997
                                                                       1995            1996    (Current                1998               1999
Procurement                                                         (Actual)        (Actual) estimated)          (Requested)        (Requested)
Arleigh Burke-class destroyer (construction and advance
procurement)a                                                            $2.6           $2.2            $3.5               $2.8               $2.7
Other ship construction and conversion                                    3.8             4.3            2.0                4.6                   3.3
Total Navy shipbuilding and conversionb                                  $6.5           $6.6            $5.5               $7.4               $6.0
Total Navy procurementc                                                $17.3           $15.8           $17.5             $18.2              $20.5
                                            Note: Numbers may not add due to rounding.
                                            a
                                             The Navy was appropriated funding for three Arleigh Burke-class destroyers in fiscal year 1995,
                                            two in fiscal year 1996, and four in fiscal year 1997 and has requested funding for three in fiscal
                                            year 1998 and three in fiscal year 1999.
                                            b
                                             Shipbuilding and conversion includes construction of new ships and certain modifications and
                                            overhauls to existing ships, such as the refueling of nuclear-powered ships and submarines and
                                            extending the service lives of ships.
                                            c
                                             Navy procurement includes ships, aircraft, weapons, ammunition, and equipment for the Navy
                                            and the Marine Corps.

                                            Source: DOD.




Capability Is the Key                       The average ship cost is determined by a number of factors, including
Driver of Surface                           business strategy, contractor competition and productivity, procurement
Combatant Cost                              rates and stability, and technical requirements and specifications.
                                            However, the key cost driver is the types of capabilities necessary for a
                                            ship to effectively perform its intended missions against anticipated
                                            threats. Procurement of combat and weapon systems with the necessary
                                            capabilities has comprised a large percentage of a surface combatant’s
                                            basic construction cost. For example, combat and weapon systems
                                            account for about 55 percent of the cost of the latest version of the Arleigh
                                            Burke-class destroyer. Navy officials indicate that the Aegis combat
                                            system is a large cost—at about $235 million, or about 25 percent of the
                                            ship’s cost. As a result, the Navy is examining ways to reduce the cost of
                                            combat and weapon systems while maintaining or improving the ship’s
                                            overall capability. Such cost savings approaches are being studied for the
                                            21st Century Surface Combatant and Arsenal Ship programs.




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    To illustrate the effect of procurement cost of new surface combatants on
    sustaining the force, we examined three preliminary ship concepts used in
    the first phase of the Navy’s cost and operational effectiveness analysis for
    the 21st Century Surface Combatant program. Each concept has a
    different set of capabilities and therefore a different estimated cost. The
    concepts are as follows:

•   The tailored capability ship concept is a lesser capable ship with high
    capability in one or two missions areas but limited or virtually no
    capability in others. It would provide capability in mission areas requiring
    large numbers of ships, such as antisubmarine warfare, rather than those
    capabilities already sufficiently available in the fleet. One version, an
    antisubmarine ship, would be a smaller, frigate-type ship equipped with
    state-of-the-art antisubmarine systems, sufficient antisurface warfare
    capabilities, and basic self-defense capabilities in other warfare areas.
•   The upgraded Arleigh Burke-class destroyer concept would incorporate
    important radar improvements and limited survivability and reduced
    manning enhancements. The ship would retain its significant capabilities
    in all other mission areas.
•   The advanced capability cruiser is a ship concept that would be about the
    size of a Ticonderoga-class cruiser and have advanced systems in all
    warfare areas, including theater ballistic missile defense; a significant
    command, control, and communications suite; enhanced survivability; and
    reduced personnel requirements. However, the ship is unlikely to be
    procured before 2010 because of the time needed to develop the advanced
    systems.

    The Navy developed rough-order-of-magnitude cost estimates for these
    notional ship concepts. We used these estimates in a procurement cost
    estimation model, provided by the Navy, to calculate
    rough-order-of-magnitude estimates of the average annual funding
    requirements to procure each of these concepts at different procurement
    rates. Figure 3.4 illustrates the consequences of funding each of these ship
    concepts.




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Figure 3.4: Annual Funding Requirements for Surface Combatant Concepts at Various Procurement Rates

Dollars in billions
7


6


5


4


3                                                                                             3 billion



2


1
     2                      3                  4                                       5
                          Number of ships procured

                       Tailored    Advanced Advanced
                       capability Arleigh Burke capability

                                        Note: These cost estimates take into account the effects of higher construction rates and
                                        production learning curves. We assumed that the lead ship would be bought in the first year and
                                        that the full-scale construction rate would begin in the third year and be maintained through the
                                        seventh. We then averaged procurement funding for that 5-year period of construction.

                                        Source: Our analysis of Navy data.




                                        With annual surface combatant construction funding at around $3 billion,
                                        the Navy could procure nearly 5 tailored capability frigates each year, for a
                                        total of 24 ships over a 5-year period. However, procurement rates for the



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                       higher capability ship concepts would be considerably lower due to their
                       higher costs, enabling procurement of only about 13 of the advanced
                       Arleigh Burke destroyers or about 8 of the advanced capability cruisers
                       over the 5-year period. Construction rates for these more capable ship
                       concepts would not be sufficient to sustain a force of at least 125 surface
                       combatants beyond 2013.


Surface Combatant      Attempts to achieve a balanced budget and manage competing priorities
Funding Will Need to   both within the Navy and among the other services will make funding
Compete With Other     surface combatant construction to sustain planned force levels difficult.
                       After fiscal year 2000, the Navy plans to increase its spending on numerous
Defense Priorities     programs to modernize and sustain its forces. These programs include the
                       F/A-18E/F strike fighter aircraft, V-22 advanced vertical lift aircraft, LPD-17
                       class amphibious transport dock ship, and New Attack Submarine, as well
                       as the 21st Century Surface Combatant and Arsenal Ship programs.
                       Additionally, the Navy plans to procure new aircraft carriers and continue
                       nuclear refueling overhauls of its Nimitz-class aircraft carriers. All of these
                       programs will place considerable fiscal pressures on the Navy’s
                       procurement budgets in general and its shipbuilding funding in particular.
                       Table 3.4 shows projected costs and number of years of funding for
                       several ongoing and planned Navy procurement programs.




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Table 3.4: Examples of Competing Navy Procurement Programs and Their Estimated Costs
Then-year dollars in billions

                                                                                                           Funding for            Fiscal years of
                                                                                                  fiscal year 1998 and             procurement
Navy program                                                                                      balance to complete                Next               Last
F/A-18E/F strike fighter aircraft                                                                                   $72.1            1998               2016
New Attack Submarine                                                                                                  63.7           1998               2015
V-22 advanced vertical lift aircraft                                                                                  38.7a          1998               2018
LPD-17 class amphibious transport dock ship                                                                            9.6           1999               2004
                                                                                                                                                           b
CVN-77 nuclear aircraft carrier                                                                                        5.4           2002
First three Nimitz-class aircraft carrier nuclear refueling overhaulsc                                                 6.8           1998               2005
                                                 a
                                                     This amount includes Air Force funding for 50 of the 523 aircraft planned for procurement.
                                                 b
                                                  The Navy is evaluating a follow-on program to the Nimitz-class nuclear aircraft carrier and
                                                 expects to procure the first new design ship in fiscal year 2006.
                                                 c
                                                  The Navy plans nuclear refueling overhauls for its Nimitz-class carriers beginning with the U.S.S.
                                                 Nimitz in fiscal year 1998. The second overhaul is scheduled for fiscal year 2001, and the third is
                                                 projected to begin about fiscal year 2005. Other Nimitz-class carriers will follow so that a carrier
                                                 will be in a shipyard undergoing a nuclear refueling overhaul for about the next 30 years, with the
                                                 exception of about 4 years during this period.

                                                 Source: Data from DOD’s Selected Acquisition Reports, December 31, 1996, and fiscal year 1998
                                                 budget submission documents.



                                                 Total new ship construction will be a substantial portion of the Navy’s
                                                 annual procurement funding in the 21st century. In July 1996, the Chief of
                                                 Naval Operations stated before Congress that the Navy would need to
                                                 increase its annual ship procurement rates after fiscal year 2000 to support
                                                 the Bottom-Up Review ship force levels of between 330 and 346 ships. The
                                                 official stated that, to sustain these levels, the Navy would need to
                                                 construct an average of 9 to 10 new ships each year, which is about 3 more
                                                 ships than its current annual construction rate.

                                                 A senior Navy official stated that the Navy’s planned investment
                                                 spending—procurement plus research and development—will have annual
                                                 shortfalls of about $5.2 billion between fiscal years 2002 and 2010. This
                                                 estimate assumes a 1-percent real growth in spending from the end of the
                                                 fiscal year 1997 defense program (fiscal years 1997 through 2001). On the
                                                 basis of estimated spending in the last year of the program, the overall
                                                 shortfall represents between 6 and 7 percent of the Navy’s total
                                                 obligational authority in those years.6

                                                 6
                                                  Total obligational authority is a financial measure unique to DOD that refers to the total value of
                                                 direct defense programs for a fiscal year. The term is essentially the same as budget authority.



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Our analysis of the Navy’s June 1996 notional long-range shipbuilding plan
suggests that shortfalls in future ship construction funding could be quite
large. The plan provided preliminary procurement projections and cost
estimates for ship construction programs through fiscal year 2020. It
generally assumed that new, more capable ships would replace retiring
ships at a slightly less than a one-for-one basis and that future ship costs
would approximate those of current ships. On the basis of the plan, we
observe that the magnitude of the estimated funding required for ship
construction in the next decade, particularly after fiscal year 2002, is
significantly higher than for recent budgets. We estimate that average
annual Navy shipbuilding funding between fiscal year 2002 and 2010 may
require over $11.6 billion each year, which is about double the average
annual funding for ship construction during the latter half of the 1990s.
Assuming, as the Navy official did, future funding levels equivalent to the
last year of the fiscal year 1997 defense program—about $7.4 billion for
shipbuilding in fiscal year 2001—and a budget growth of 1 percent, we
estimate that annual funding for ships will be short, on average, about
$3.8 billion each year between fiscal year 2002 and 2010.7 If no budget
growth is assumed, the average annual shortage for that period increases
to about $4.2 billion.

Further, the other military services are also planning several expensive
procurement programs over the same period. The Air Force plans to begin
procuring the F-22 fighter aircraft in fiscal year 1999, and that program is
expected to cost $54.9 billion in then-year dollars between fiscal year 1998
and 2015. The Army plans to procure the Longbow Apache attack
helicopter at an estimated cost of $6.1 billion over the next 11 years and
the Comanche helicopter at an estimated cost of $41.7 billion in then-year
dollars over the life of the program. The Air Force, the Navy, and the
Marine Corps plan to begin procuring the Joint Strike Fighter later in the
next decade, which could be DOD’s most expensive future weapon
program. On the basis of DOD’s goals for the Joint Strike Fighter, the
Congressional Budget Office estimates the program could cost
$165 billion, excluding inflation, or up to $219 billion if the program’s
estimated cost is based on the historical relationship between cost and
aircraft performance. Tentative plans are for the Navy and the Marine
Corps to procure about one-third, or 940, of the estimated 3,000 aircraft to
be bought through fiscal year 2030.




7
 Planned funding for ship construction in fiscal year 2001 would be the second highest amount in any
year since fiscal year 1993.



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The Chairman of the Joint Chiefs of Staff advised Congress in March 1996
that annual procurement funding would need to increase to $60 billion
over the next several years to adequately support the cost of DOD’s planned
modernization programs. Such an increase in annual procurement funding
will require that the current allocation of funds among appropriation
accounts change significantly. This change would be made more difficult
because of congressional commitment to a balanced budget plan by fiscal
year 2002. Reaching and retaining a balanced budget may put pressure on
Congress and future administrations to reduce, rather than increase,
defense budgets.




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                      DOD and the Navy are expected to make several decisions regarding
                      surface combatants and other major assets, including those designed to
                      achieve ground attack and provide defense against ballistic missiles. These
                      decisions could affect the size, composition, and overall capability of the
                      surface combatant force through the middle of the next century. The
                      decisions, to be made over the next several years, involve approving a
                      program to design and construct the 21st Century Surface Combatant,
                      evaluating the Arsenal Ship concept and designing and approving the
                      ship’s construction, and continuing to procure the remaining new Arleigh
                      Burke-class destroyers.

                      Several factors could affect future surface combatant force goals. These
                      factors include the results of DOD’s planned review of defense strategy and
                      requirements, which could change the planning parameters for meeting
                      the mandates of the U.S. military strategy; new or improved capabilities,
                      which could affect doctrine, operational concepts, and responsibilities for
                      the force; introduction of the 21st Century Surface Combatant and Arsenal
                      Ship, which could lead DOD and the Navy to reexamine force requirements
                      and employment; and force efficiency strategies, such as expanded
                      overseas home porting and alternative deployment schemes, which could
                      help to increase force availability and use.


                      Force structure decisions for ships have long-term consequences on the
Near-term Decisions   size and overall capability of future forces. The number of years between
Could Affect the      the introduction of a class of ships into the force and their progressive
Force for Many        retirements can span nearly half a century. This time span does not
                      include the many years needed for the initial planning, design, and
Decades               construction before the first ship’s delivery. Figure 4.1 shows the
                      approximate force lives of the Ticonderoga-class cruiser, the Arleigh
                      Burke-class destroyer, and the planned 21st Century Surface Combatant
                      class. As shown, the Ticonderoga-class cruisers and the Arleigh
                      Burke-class destroyers are expected to remain a part of fleet force
                      structure for about 46 and 54 years, respectively. The 21st Century Surface
                      Combatant force life of about 49 years assumes a 20-year building program
                      beginning in fiscal year 2003, a 5-year construction period for each ship,
                      fleet delivery of the first ship in fiscal year 2009, and a 35-year expected
                      service life.




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Figure 4.1: Projected Force Lives of Selected Surface Combatant Classes

  A                    B                           C                                         D             E
 1978                 1983                        1994                                      2018          2029

   Program approval
       and initial                              Ticonderoga-class cruiser: 46 years
      construction




                 A                        B                                       C                    D                  E
                1981                     1991                                    2010                 2026               2045

                      Program approval
                          and initial
                         construction
                                                             Arleigh Burke-class destroyer: 54 years



                                                           A                      B                 C                    D                  E
                                                          1997                   2009              2023                 2044               2058

                                                              Program approval
                                                                  and initial           21st Century Surface Combatant-class: 49 years
                                                                 construction




        A = Program approval/
            initial ship construction
        B = First ship delivered
        C = Last ship delivered
        D = First ship retired
        E = Last ship retired



                                                              Source: Our analysis of Navy data.




                                                              Over the next several years, DOD and the Navy are expected to make many
                                                              important decisions on the surface combatant force structure, as well as
                                                              for other joint military assets with capabilities in similar mission areas.
                                                              These decisions, which are likely to affect the capabilities, size, and
                                                              composition of the overall force for many decades, include the following:

                                                         •    A series of “acquisition milestones” decisions for the 21st Century Surface
                                                              Combatant program to proceed through the design, development, and
                                                              construction of the new ship, as well as annual funding decisions on the
                                                              ship’s procurement for many years. The next major decisions are to




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                          complete the ongoing cost and operational effectiveness analysis in 1997
                          and approve the program to begin design and development work
                          (acquisition milestone I)1 around July 1997.
                      •   Decisions on operational concepts and design of an Arsenal Ship,
                          construction of a demonstration ship for evaluation, and potential
                          follow-on construction program for 3 to 5 additional ships. Near-term
                          events include industry teams to do detailed design work through 1997,
                          authorize a contract to one of three industry teams for construction of a
                          demonstration ship in January 1998, and begin concept evaluation at sea in
                          late 2000.2
                      •   Annual budget decisions on the continued procurement of the remaining
                          Arleigh Burke-class destroyers through fiscal year 2005.


                          In its May 1995 report,3 the Commission on Roles and Missions of the
Review May Change         Armed Forces recommended that the Secretary of Defense conduct a
DOD Planning              quadrennial review of the defense program at the beginning of each newly
Parameters for            elected presidential administration. The Commission believed the review
                          “. . . would provide the foundation for a consistent military strategy,
Meeting National          defense force posture, and budget estimate for use in the Secretary’s [of
Security Objectives       Defense] programming direction to Defense components” and “. . . could
                          in addition serve as a basis for developing a consensus between the
                          executive and legislative branches on a four-year DOD funding level.”

                          The Secretary of Defense endorsed the concept, and Congress later
                          included a provision mandating such a review in the National Defense
                          Authorization Act for Fiscal Year 1997. The review is to involve a
                          comprehensive examination of defense active and reserve force structure,
                          modernization plans, infrastructure, and other elements of the defense
                          program and policies to determine defense strategy and establish a revised
                          defense program through 2005. Results of the review are due by May 15,
                          1997. Additionally, the act required an independent panel of defense

                          1
                           Milestone I, Approval to Begin a New Acquisition Program, in the DOD acquisition process establishes
                          a new program and approves an acquisition strategy and concept baseline containing initial program
                          cost, schedule, and performance objectives.
                          2
                           The three industry teams performing design work during 1997 are (1) General Dynamics,
                          Marine/Electric Boat, Raytheon Electronic Systems, and Science Applications International
                          Corporation; (2) Lockheed Martin, Litton Industries/Ingalls Shipbuilding, and Newport News
                          Shipbuilding; and (3) Northrop Grumman Corporation, National Steel and Shipbuilding Company,
                          Vitro Corporation, and Band Lavis and Associates, Inc. The Defense Advanced Research Projects
                          Agency plans to select one of the three industry teams in January 1998 to complete final design work
                          and construct a demonstration ship.
                          3
                            Directions for Defense (Report of the Commission on Roles and Missions of the Armed Forces,
                          May 24, 1995).



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                       experts to submit a comprehensive assessment of DOD’s report and
                       conduct an assessment of alternative force structures through the year
                       2010 and beyond by December 1, 1997.

                       This quadrennial defense review could result in significant changes in the
                       parameters used to plan the forces needed to meet national security
                       objectives. These changes could include adopting different planning
                       scenarios and parameters for future MRCs, readjusting force structure
                       priorities to meet national security objectives, and proposing new
                       initiatives to meet requirements and create efficiencies in defense
                       spending. Depending on the nature and extent of these changes, the size,
                       composition, required capability, and employment of the surface
                       combatant force, as well as other major military components, could be
                       significantly altered. For example, a recent Navy report, 21st Century
                       Surface Combatant Force Architecture Assessment, illustrated the effect
                       on force size of changing the two nearly simultaneous MRC requirement.
                       With the assumption that a 145-ship force of current ship types, with some
                       allied support, is needed for the current MRC requirement, the assessment
                       calculated that changing the requirement to two simultaneous MRCs could
                       increase the required force size by about 20 ships. Changing the
                       requirement to two sequential MRCs or one MRC could reduce the
                       war-fighting force requirement by as much as 45 ships (assuming some
                       allied support).


                       Several significant improved or new capabilities could affect the
New Capabilities       requirement for surface combatants. Even though these improvements and
Could Affect Surface   capabilities could add new responsibilities for the force, they could
Combatant Roles and    provide greater efficiencies in the use of the force and allow changes in
                       doctrine and operational concepts that could reduce force requirements.
Missions               Various improvements to the Tomahawk cruise missile to enhance its
                       effectiveness and capabilities could allow the missile to be used for
                       tactical applications in support of ground operations during crisis and war.
                       Also, the Navy is modifying the Aegis combat system and improving the
                       Standard missile to provide a defense against theater ballistic missile
                       attacks while operating in littoral areas. Additionally, the introduction of
                       the Cooperative Engagement Capability on existing and new combatants
                       and other ships will enhance the ships’ self-defense capabilities by
                       increasing the response time and amount of information available to
                       defend against antiship cruise missile threats. This capability is also
                       critical for theater ballistic missile defense operations.




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Planned Improvements for    The Navy is making various improvements to the Tomahawk cruise missile
Tomahawk Will Likely        to increase its effectiveness, flexibility, and responsiveness and strengthen
Affect Its Use in Warfare   mission planning capabilities aboard ships. In addition to upgrades to the
                            missile’s guidance, navigation, and control systems, the Navy plans to
                            incorporate a penetrating warhead, which will expand potential targets to
                            include weapon bunkers and reinforced structures.4 Several
                            enhancements, such as the Afloat Planning System and the Advanced
                            Tomahawk Weapon Control System, will allow forces at sea to plan and
                            modify land attack missions more rapidly than currently possible.

                            A significant change planned for Tomahawk is to employ it for tactical
                            applications against an adversary’s military forces and to support the
                            ground war. Currently, it can be deployed against strategically important
                            targets, such as command and control facilities and radar sites, under the
                            control of the unified commanders. According to Navy officials, using the
                            missile for tactical applications could have a significant affect on ship
                            operations and the number of Tomahawk missiles because of the potential
                            increase in missions and targets. Additionally, the U.S. military is making
                            changes to the command and control structure, which may allow theater
                            commanders to use Tomahawk missiles for tactical applications.
                            Figure 4.2 shows the Aegis cruiser U.S.S. Shiloh launching a Tomahawk
                            missile against a target in southern Iraq in September 1996.




                            4
                             Tomahawk land attack missiles can currently carry a 1,000-pound-class high-explosive or a
                            submunition warhead against land targets that are fixed or not easily relocatable.



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Figure 4.2: An Aegis Cruiser Launching a Tomahawk Cruise Missile Against an Iraqi Target




                                          Note: Several planned Tomahawk improvements will greatly enhance Navy surface combatants’
                                          unique capability to conduct long range precision strikes from the sea.

                                          Source: Navy.




Theater Ballistic Missile                 Theater ballistic missiles have been used in six regional conflicts since
Defense Capability Is a                   1973—the most recent of which was the 1994 conflict between North and
Major New Mission                         South Yemen in which Scud missiles were armed with conventional
                                          warheads.5 The Navy is developing a capability for Aegis-equipped cruisers
                                          and destroyers to defend against this threat by using improved Standard

                                          5
                                           A ballistic missile does not rely on aerodynamic surfaces to produce lift and consequently follows a
                                          ballistic trajectory when thrust is terminated. Generally, a theater ballistic missile travels less than
                                          3,500 kilometers, or 1,889 nautical miles. These missiles can carry conventional, nuclear, or chemical
                                          warheads.



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                            surface-to-air missiles. The Navy believes that this defensive capability will
                            become an important new mission for its surface combatants in MRCs and
                            that a sea-based capability is essential for protecting U.S. and allied forces,
                            population centers, logistics facilities, and key coastal areas from missile
                            attacks. The Navy also believes its surface combatants will (1) provide the
                            only initial capability to defend arriving ground forces against ballistic
                            missile attacks, particularly in the early days of a crisis, and (2) have the
                            advantages of independent operations, rapid relocation, high survivability,
                            and self-sustainability.

                            The Navy plans to modify the Aegis combat system and make
                            improvements to its Standard surface-to-air missile. The system’s primary
                            air search radar will be modified to allow it to search at higher elevations
                            and for longer ranges and maintain its tracking on ballistic missile targets.
                            The system is being designed to predict intercept points and engagement
                            limits, initialize missile firings, and provide communication with the
                            missile as it travels to intercept the target. Aegis equipment is to be
                            modified to display missile tracks and engagements and communicate
                            with other elements of the combat system and remote sensors.

                            The Navy intends to (1) initially deploy the area defense portion of this
                            capability to protect joint forces in littoral areas and coastal airfields and
                            (2) later add the theaterwide portion to protect vital assets over entire
                            regions. The Navy plans to equip two Aegis cruisers with an operational
                            evaluation version of the area defense portion in fiscal year 1998 and
                            deploy the tactical version on Aegis cruisers and destroyers beginning in
                            fiscal year 2001.

                            Increased use of a theater ballistic missile capability for littoral operations
                            could allow the Navy to protect larger areas with fewer surface
                            combatants. Also, the capability allows the use of a more efficient firing
                            doctrine for many engagement situations than the doctrine used for area
                            defense missiles. This doctrine reduces magazine space requirements and,
                            in turn, reduces the number of ships.


Cooperative Engagement      The Navy plans to begin deploying the Cooperative Engagement Capability
Capability Could Increase   on many of its ships later in the decade. This computer-based information
Connectivity Among          exchange system permits the simultaneous sharing of detailed targeting
                            information between ships or forces at extensive ranges within the littoral
Forces                      area, thereby increasing reaction time and firing opportunities against
                            enemy missile attacks. By creating a single composite threat picture from



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                        all the sea-, air-, and land-based sensors in the area, ships with less
                        sophisticated combat systems will have the same quality sensor, decision,
                        and engagement information as Aegis-equipped ships. This system is
                        designed to enhance capabilities to rapidly respond to enemy attacks by
                        providing an over-the-horizon capability that will give the local
                        commander the ability to defend against threats not yet detected by
                        sensors. The Navy believes this capability will be a major defense against
                        antiship sea-skimming cruise missiles.

                        This capability may allow the Navy to acquire some ships with lesser
                        capability than Aegis. For example, the proposed Arsenal Ship will depend
                        heavily on this capability for its operations, and thereby reduce its need
                        for a sophisticated combat system and sensors. The capability is currently
                        installed on the aircraft carrier U.S.S. Eisenhower, the Aegis cruisers
                        U.S.S. Anzio and U.S.S. Cape St. George, and the amphibious assault ship
                        U.S.S. Wasp. The Navy plans to install this equipment on additional aircraft
                        carriers, surface combatants, amphibious ships, and carrier-based E-2C
                        tactical warning and control system aircraft between fiscal year 2000 and
                        2010. By fiscal year 2003, the Navy plans to have the capability on about 60
                        ships and aircraft.


                        The Navy and the Defense Advanced Research Projects Agency are
Arsenal Ship Could      developing a new type of ship—the Arsenal Ship—that has the potential to
Significantly Augment   provide substantial fire support to a variety of missions in regional
Surface Force           conflicts without the logistics burden of transporting both delivery
                        systems and ammunition to the shore and forward areas. The Arsenal Ship
Capabilities            is expected to carry a large number of VLS cells but without the
                        sophisticated command and control and radar equipment found on
                        Aegis-equipped ships. This ship, which will rely on other military assets,
                        including surface combatants, to provide the targeting information and
                        connectivity necessary to launch its weapons, will have the equivalent
                        ordnance—about 500 vertically launched weapons from a wide variety of
                        the military’s inventory—of about four or five Aegis cruisers and
                        destroyers. Figure 4.3 shows design proposals for the Arsenal Ship from
                        three competing industry teams.




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Figure 4.3: Design Proposals for the
Navy’s Arsenal Ship Concept




                                       Source: General Dynamics, Marine team.




                                       Source: Lockheed Martin team.




                                       Source: Northrop Grumman team.




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                     The Navy plans to maintain the Arsenal Ship forward deployed in major
                     overseas regions for extended periods by rotating the ship’s crew and
                     returning the ship only for major maintenance and overhauls. This plan
                     will allow the Navy to use fewer Arsenal Ships to maintain overseas
                     presence than if the ships were deployed routinely from the United States
                     and permit their early availability in a conflict. Additionally, if the Arsenal
                     Ship concept proves successful and within its current cost projections
                     (around $500 million for construction of each ship), DOD and the Navy may
                     be able to retire or forego purchases of some assets, such as aircraft
                     carriers, surface combatants, ground-based launchers, or combat aircraft.6


                     Several operational factors, such as distance and transit speeds to reach
Opportunities May    areas of deployment, deployment schemes and group configurations, and
Exist to Improve     personnel and maintenance policies affect how the force is employed.
Force Efficiencies   Over the years, Navy and independent studies have suggested ways to
                     improve the use and availability of the surface combatant force by
                     adjusting these factors. For example, a Navy report, Surface Combatant
                     Force Level Study, provided some options to increase not only availability
                     of ships for crisis and war but also their availability during peacetime. The
                     study suggested that the Navy home port more ships in more locations
                     overseas, if possible, and increase the home porting of Aegis-capable ships
                     overseas to reduce transit distances and maintain capabilities closer to
                     potential crisis areas. Although increasing overseas home porting of
                     surface combatants may be difficult, Pacific Fleet officials indicated that
                     the Navy began home porting more Aegis-capable ships in Japan and
                     Hawaii as older, less capable ships returned for overhaul or retirement.
                     The study also suggested having surface combatants deploy to potential
                     trouble areas early and independently of other forces, such as carrier
                     battle groups, to increase the capabilities available early in a conflict.

                     Other studies have suggested changes to deployment schemes and
                     personnel policies, such as shortening the time between deployments,
                     lengthening the deployment period, rotating crews, increasing transit
                     speeds, and using different maintenance schemes, to increase the
                     availability of ships for deployment in peacetime. As these studies show,
                     those and other changes have the potential for significant cost and force
                     structure savings and improved force efficiencies. On the other hand, such
                     changes could also affect personnel retention and morale, training,

                     6
                      In informal written comments to the report, DOD indicated that a potential issue with the Arsenal
                     Ship would be the cost of the weapons for additional VLS cells. DOD stated that the number of
                     programmed VLS cells without the Arsenal Ship is about 30 percent larger than the funded inventory of
                     VLS-cell weapons.



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readiness, and fleet structuring. Many of these changes are not new, but
they may help the Navy to achieve sufficient risk aversion as it operates
with a smaller force structure and budget.




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Conclusions and Recommendations


              Surface combatants will continue to play an important role in the
              deployment of naval and joint forces overseas during peacetime and in
              conflict by providing a wide range of defensive and offensive capabilities.
              Since the capabilities of individual ships have increased and a greater
              emphasis has been placed on fighting in littoral areas, the surface
              combatant force has assumed new or increased roles and missions, such
              as conducting deep strikes against land targets with their Tomahawk
              missiles and providing a future capability to defend against theater
              ballistic missiles. The Navy believes this force, to be composed of
              increasingly capable multimission ships with the Aegis combat system,
              may assume greater importance in supporting joint forces in future
              conflicts. However, the Navy has not yet provided an adequate explanation
              to Congress of the relationship between surface combatant force structure
              requirements and national security objectives.

              DOD faces a major challenge in recapitalizing its forces across the military
              services during a period when the administration and Congress attempt to
              balance the federal budget. Given this challenge, the Secretary of Defense
              must make difficult tradeoff decisions among competing weapon
              modernization programs. The Navy is nearing completion of a cost and
              operational effectiveness analysis for a new surface combatant class and
              plans to initiate the program this year. It also has begun an accelerated
              effort to develop a new ship concept, the Arsenal Ship. Both these
              programs will help to modernize and sustain the surface combatant force
              but will also require significant funding in future Navy budgets. However,
              DOD’s annual budget presentations to Congress have not clearly indicated
              how surface combatant ships contribute to achieving U.S. national
              security objectives and why large future budgetary outlays are needed to
              sustain the surface combatant force into the next century.


              Since the end of the Cold War, the Navy’s surface combatant force has
Conclusions   been resized to a smaller yet increasingly more capable force as older, less
              capable ships have been replaced with Aegis-capable Ticonderoga-class
              cruisers and Arleigh Burke-class destroyers. These new ships bring to the
              force significant new capabilities, such as the Aegis combat system, VLS,
              and Tomahawk cruise missile, and will bring in the future the Cooperative
              Engagement Capability and theater ballistic missile defense. By the end of
              fiscal year 2003, the Navy will have about the same number of cruisers and
              destroyers as it had during the Cold War in the late 1980s—about 105.
              However, the cruisers and destroyers in the surface combatant force in




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2003 will far exceed the capabilities possessed by similar-type ships in the
late 1980s.

The Navy’s Arleigh Burke-class destroyer program remains essentially as
envisioned when it was initiated during the Cold War as a counter force to
the former Soviet Union. It remains driven by the desire to increase the
capabilities of the force and sustain the surface combatant shipbuilding
industrial base. The ongoing Arleigh Burke-class destroyer construction
program allows the Navy to sustain surface combatant force through the
next decade at a level higher than the current size of about 125 ships.

The Bottom-Up Review generally established the size of the current
surface combatant force to implement the national military strategy.
Subsequent budget, industrial base, and operational considerations have
supported a near-term force size of at least 125 ships. The Navy will have
131 surface combatants (123 active and 8 reserve ships) by the end of the
current defense program in fiscal year 2003. However, DOD’s long-term
surface combatant force goal beyond the current defense program and the
range of capabilities that Navy surface combatants need to implement the
national military strategy objectives are still undecided.

The Navy has conducted several internal studies to define surface
combatant war-fighting roles and missions and the size of force and
capabilities that are anticipated to deploy in the future. These studies
show that size of the needed force can vary significantly depending on the
assumptions underlying the analyses. Some key assumptions include the
planning parameters made for the type and occurrence of future MRCs; the
roles and missions of naval, other U.S. military, and allied forces in a joint
or combined warfighting environment; and operational constraints. The
studies concluded that the various assumptions made in the analyses
indicate that the Navy could support a larger surface combatant force than
now exists. However, the variability in these assumptions can also result
in numbers below the currently programmed force levels.

DOD and the Navy are moving forward with several programs that could
significantly change surface combatant requirements. For example, the
significant offensive and defensive capabilities of the proposed Arsenal
Ship could lessen the need for costly, higher capability surface
combatants, as well as permit the Navy and the other services to retire or
forego purchases of some assets, such as aircraft carriers, ground-based
launchers, or combat aircraft. Likewise, the development and
implementation of a Cooperative Engagement Capability, which allows



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                  radar and other data to be shared among remote users, may allow the
                  Navy to design, build, and deploy fewer, less costly surface combatants.

                  The Navy plans to retire a large number of surface combatants after the
                  end of the next decade. To sustain force levels of at least 125 ships
                  through 2020, the Navy will need to begin building more new ships than
                  are currently built each year sometime before these retirements begin.
                  However, we believe that, with such a large percentage and number of
                  Aegis-capable cruisers and destroyers in the force at the time of these
                  retirements (about 84 ships) and with the significant firepower potential of
                  the proposed Arsenal Ship, the significant number of retirements will not
                  have a great effect on the overall capability of the force as it declines
                  below 125 ships after 2013. As a result, the Navy may be able to accept a
                  smaller, but still highly capable, surface combatant force or begin
                  procuring a less costly and capable ship than the Arleigh Burke-class
                  destroyer. The Navy can further defer difficulties with force size by
                  retaining its ships as long as planned or longer if maintenance
                  considerations allow this to be practical. For example, the Navy plans to
                  keep its current destroyers for 35 years—longer than the historical average
                  of 30 years. If the Navy is unable to achieve these longer service lives, it
                  will be forced to decide on whether to procure replacement ships sooner
                  than planned.

                  The effects of expected service life, individual ship cost, and annual
                  funding have significant consequences on Navy force structure decisions.
                  The Navy will be challenged to achieve a reasonable balance between
                  these factors. Its ability to maximize ship service lives and manage costs
                  for new ships to a large extent determine the size and type of surface
                  combatant force the Navy will be able to sustain over the long term.
                  Additionally, the competition for procurement funding from other Navy
                  and service programs, as well as from other appropriation accounts, may
                  significantly restrain the annual share allocated for surface combatants.
                  These factors will particularly influence planning and budgeting decisions
                  the Navy makes for sustaining the surface combatant force, particularly
                  the design, cost, and construction of the 21st Century Surface
                  Combatant-class over the next several years.


                  We recommend that the Secretary of Defense provide Congress with
Recommendations   specific information regarding the surface combatant force. Such
                  information should include the




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                     •   number and types of surface combatants that are needed to fight and win
                         two nearly simultaneous MRCs;
                     •   number of ships that are needed to meet peacetime forward presence
                         objectives;
                     •   key assumptions that support the force level and mix, such as expected
                         allied contributions;
                     •   expected impact of new technologies and capabilities on the size and
                         composition of the future force; and
                     •   impact of the Arsenal Ship on the surface combatant force structure.

                         We also recommend that the Secretary provide information on the Navy’s
                         plan to sustain the surface combatant force level, including key
                         assumptions regarding expected service lives, pace of the shipbuilding
                         program, types of ships, required funding, and any other factor that might
                         alter the requirement.


                         DOD concurred with the information in this report and the
Agency Comments          recommendation. DOD stated that the programmed surface combatant
and Our Evaluation       force structure contained in the fiscal year 1998 budget and associated
                         Future Years Defense Program are adequate to support DOD’s current
                         presence and contingency response requirements. However, DOD officials
                         stated that the current force structure is based largely on budget,
                         industrial base, and operational considerations rather than specific
                         linkages to national military strategy objectives.

                         DOD  stated that the information regarding surface combatants listed in the
                         recommendation would be provided to Congress as a result of the ongoing
                         Quadrennial Defense Review. DOD indicated that the results of the review
                         should provide a basis for understanding future surface combatant needs.
                         Although the review could establish a strategic context for surface
                         combatants, as did DOD’s 1993 Bottom-Up Review, we believe that the
                         broad scope of the review may not adequately provide the specific
                         discussion of surface combatant requirements that our recommendation is
                         intended to provide. Thus, considering the significant investment and
                         annual budget requirements needed for surface combatants, we have
                         retained the recommendation.

                         DOD’s comments appear in appendix III. Additionally, DOD updated the
                         report to reflect information its fiscal year 1998 budget request, and we
                         have incorporated this information into the report.




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Appendix I

Selected Carrier Battle Group Deployments


                                          Surface combatants are a major element of the Navy’s carrier battle
                                          groups.1 These groups, which also include an aircraft carrier, air wing,
                                          nuclear attack submarines, and a fast combat support ship, routinely
                                          deploy during peacetime to maintain the primary overseas naval presence
                                          on a nearly continuous basis in the Mediterranean Sea, western Pacific
                                          Ocean, and North Arabian Sea. They also help provide an initial military
                                          capability to respond to crisis and enable the introduction and build up of
                                          additional forces as needed. Tables I.1 and I.2 show the number and types
                                          of surface combatants that deployed with the Atlantic and Pacific Fleet
                                          carrier battle groups, respectively, between May 1994 and February 1996.
                                          The tables also show some of the geographic areas and the responsible
                                          unified commands where the surface combatants operated during the
                                          deployments.


Table I.1: Atlantic Fleet Carrier Battle Group Deployments
Carrier battle group and dates of                                                               Unified commands and operational
deployment                                    Number and type of surface combatants             areasa
U.S.S. George Washington (CVN-73),         2 Ticonderoga-class cruisers, 1 Arleigh              European Command—Mediterranean Sea,
May to November 1994                       Burke-class destroyer, 2 Spruance-class              Adriatic Sea, and Black Sea
                                           destroyers, and 1 Oliver Hazard                      Central Command—Arabian Gulf
                                           Perry-class frigate
U.S.S. Dwight D. Eisenhower (CVN-69),      2 Ticonderoga-class cruisers, 1 Kidd-class European Command—Mediterranean Sea,
October 1994 to April 1995                 destroyer, 1 Spruance-class destroyer, and Adriatic Sea, and Aegean Sea
                                           2 Oliver Hazard Perry-class frigates       Central Command—Arabian Gulf and Red
                                                                                      Sea
U.S.S. Theodore Roosevelt (CVN-71),        2 Ticonderoga-class cruisers,                        European Command—Mediterranean Sea,
March to September 1995                    1 Virginia-class nuclear cruiser, 1 Arleigh          Adriatic Sea, and Black Sea
                                           Burke-class destroyer, and 2 Oliver                  Central Command— Arabian Gulf and Red
                                           Hazard Perry-class frigates                          Sea
U.S.S. America (CV-66),                    2 Ticonderoga-class cruisers,                        European Command—Mediterranean Sea
August 1995 to February 1996               1 California-class nuclear cruiser,                  and Adriatic Sea
                                           1 Kidd-class destroyer, and 2 Oliver                 Central Command—Arabian Gulf and Red
                                           Hazard Perry-class frigates                          Sea
                                          a
                                           This listing shows only some of the geographic areas visited by surface combatants from the
                                          respective carrier battle group.




                                          1
                                           In addition to deploying with an aircraft carrier as part of a carrier battle group, surface combatants
                                          deploy with other combatants as a surface action group or by themselves.



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                                          Selected Carrier Battle Group Deployments




Table I.2: Pacific Fleet Carrier Battle Group Deployments
Carrier battle group and dates of                                                           Unified commands and operational
deployment                                    Number and type of surface combatants         areasa
U.S.S. Kitty Hawk (CV-63),                 2 Ticonderoga-class cruisers,                    Pacific Command—Korean coastal waters
June to December 1994                      1 California-class nuclear cruiser, and          and Japanese coastal waters
                                           1 Oliver Hazard Perry-class frigate
U.S.S. Constellation (CV-64),              2 Ticonderoga-class cruisers and                 Pacific Command—Korean coastal waters
November 1994 to May 1995                  1 Spruance-class destroyer                       Central Command—Arabian Gulf and Red
                                                                                            Sea
U.S.S. Abraham Lincoln (CVN-72),           1 Ticonderoga-class cruiser,                     Pacific Command—Japanese coastal
April to October 1995                      1 Arleigh Burke-class destroyer, and             waters and Hawaiian coastal waters
                                           1 Spruance-class destroyer                       Central Command—Arabian Gulf
                                          a
                                           This listing shows only some of the geographic areas visited by surface combatants from the
                                          respective carrier battle group.



                                          Surface combatants from battle groups in the Atlantic Fleet provide
                                          presence in the Mediterranean Sea, exercising with allies in the region and
                                          conducting port visits. These ships also provide a portion of the carrier
                                          battle group presence in the Arabian Gulf. Each of the four Atlantic fleet
                                          deployments that we reviewed involved port visits and exercises in the
                                          Mediterranean Sea, U.N. peacekeeping operations in the Adriatic Sea, and
                                          Iraqi sanctions-related operations in the Arabian Gulf.

                                          Pacific Fleet battle groups provide presence in the western Pacific Ocean,
                                          Indian Ocean, and Arabian Gulf. Two of the three Pacific Fleet
                                          deployments we reviewed included Arabian Gulf operations to intercept
                                          illegal shipping and enforce sanctions against Iraq and bilateral exercises
                                          with allies in the region. For example, one battle group that deployed to
                                          the Central Command area, which consisted of an Aegis cruiser, an Aegis
                                          destroyer, and a Spruance-class destroyer, participated in northern
                                          Arabian Gulf operations and maritime intercept operations. The battle
                                          group also participated in four different exercises with allies in the
                                          Arabian Gulf and made various port visits. Additionally, all three Pacific
                                          Fleet deployments conducted training operations and exercises in seas
                                          adjacent to Korea and Japan.

                                          During peacetime operations, most surface combatants split from the
                                          battle group into smaller formations when reaching an area of deployment
                                          to conduct specific missions, such as training, exercises with allies, and
                                          port visits in the region. (Usually one or more surface combatants, either a
                                          frigate or Aegis-capable cruiser or destroyer, in the group stays with the
                                          carrier to provide defense against air threats.) For example, the Atlantic



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Selected Carrier Battle Group Deployments




Fleet continuously assigned one combatant from a battle group to meet
the North Atlantic Treaty Organization (NATO) Standing Naval Force
Mediterranean requirement for exercises with various allies in the area.2 A
frigate is usually provided rather than an Aegis-capable destroyer or
cruiser. In each of the recent Atlantic Fleet battle group deployments we
reviewed, one ship was continuously assigned to the NATO force, although
that ship was not the same throughout the deployment. An Atlantic fleet
official stated that, for the last 3 years, ships assigned to the NATO force
have been in the Adriatic Sea as part of the task force supporting the U.N.
peacekeeping operation in the former Yugoslavia.




2
 The NATO Standing Naval Force Mediterranean requirement consists of destroyers and frigates
assigned by member nations that are available on short notice for an early military response to a crisis.



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Appendix II

Operational Factors That Affect How
Surface Combatants Are Employed

                  The Navy’s operational, maintenance, and personnel policies affect how
                  surface combatant force are employed. Such factors as maintenance
                  requirements, personnel quality-of-life guidelines, the frequency and
                  duration of operations, training needs, distance, and the time spent
                  traveling to and from deployment areas all enter into determining ship
                  availability and employment.


                  Surface combatants and other Navy ships periodically require major
Major Overhauls   overhauls that leave them unavailable for immediate deployment. For
                  most surface combatants, these overhauls generally occur
                  every 80 months for periods of over 6 months. The average surface
                  combatant spends about 7.7 percent of its life in major overhauls.1 For
                  example, in a force of 100 surface combatants, the Navy would have about
                  92 ships available for deployment at any given time and about 8 ships in
                  some phase of a major overhaul. Figure II.1 shows two of the Navy’s
                  Spruance-class destroyers, the U.S.S. John Hancock (DD-981) and
                  U.S.S. Thorn (DD-988), undergoing routine overhauls at the Newport News
                  Shipbuilding and Drydock Corporation at Newport News, Virginia.




                  1
                   According to a Navy official, this figure was derived by computing an average for all surface
                  combatants from the Navy’s guidance on depot-level maintenance availabilities of ships.



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                                         Appendix II
                                         Operational Factors That Affect How
                                         Surface Combatants Are Employed




Figure II.1: U.S.S. John Hancock and U.S.S. Thorn Undergoing Routine Overhauls




                                         Note: The U.S.S. John Hancock is on the left, and the U.S.S. Thorn is on the right.

                                         Source: Navy.



                                         During peacetime, the availability of surface combatants for deployments
Personnel Tempo                          is affected by the Navy’s policy on personnel tempo (PERSTEMPO). This
                                         policy limits the amount and duration of time personnel are away from
                                         their home port compared with the time they spend at sea and in other
                                         ports. Time spent in major overhauls is not included in PERSTEMPO
                                         calculations.




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                        Appendix II
                        Operational Factors That Affect How
                        Surface Combatants Are Employed




                        In response to concerns about excessive periods at sea, the Chief of Naval
                        Operations established a PERSTEMPO policy in October 1985 to achieve a
                        balance between quality-of-life considerations for Navy personnel and the
                        need to sustain fleet operational readiness. The policy guidelines have
                        three specific goals, which are to

                    •   limit the length of any deployment, including transit time, to 6 months;
                    •   ensure that, before beginning a new deployment, ship personnel spend a
                        minimum of 2 months in their home port operating area for every month
                        the ship was deployed; and
                    •   ensure that the ship and its personnel spend a minimum of 50 percent of
                        the time during a recurring 5-year period in their home port.

                        By limiting the length of deployments and requiring a minimum time in
                        home port and home operating area for its personnel, PERSTEMPO policy
                        affects the number of ships that can be deployed at a given time.
                        According to Atlantic Fleet officials, PERSTEMPO helps keep up the morale
                        of Navy personnel and maintain acceptable retention levels in an
                        all-volunteer Navy. During crisis and war, these goals can be temporarily
                        suspended to increase the number of deployed ships.


                        Operational tempo (OPTEMPO) defines the fuel budgeted to fund operations
Operational Tempo       and training for ships, commonly referred to as the steaming days
                        program. The budget for the steaming days program is based on a formula
                        that considers the number and types of ships; the number of operating and
                        maintenance months; and utility, fuel, repair, and other estimated costs. In
                        recent years, the OPTEMPO goals for ships have been 50.5 days at sea per
                        quarter for deployed forces, 29 days at sea per quarter for nondeployed
                        Atlantic fleet forces, and 27 days at sea per quarter for nondeployed
                        Pacific fleet forces. The remaining time each quarter in intended to be
                        used for overhaul, upkeep, training, and crew rest. If operational
                        requirements are higher than planned, ships may exceed the OPTEMPO goals
                        to meet the additional days required at sea.


                        Ships returning from deployment generally require nearly 1-1/2 years to
Interdeployment         prepare for a subsequent deployment. During this interdeployment cycle,
Cycle                   short-term ship maintenance, repairs, and upgrades to the ship’s systems
                        are completed, and personnel participate in training activities.
                        Additionally, this period allows the ship’s personnel to take leave and
                        spend time in their home port.



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                       Appendix II
                       Operational Factors That Affect How
                       Surface Combatants Are Employed




                       The Navy uses a turnaround ratio to measure the rate at which ships will
                       be available for their next deployment. This ratio is determined by dividing
                       the interdeployment cycle time by the length of a deployment. For
                       example, if ships require 18 months between 6-month deployments, they
                       have a turnaround ratio of 3:1. PERSTEMPO policy requires a minimum of a
                       2:1 ratio to ensure that ship personnel spend at least 2 months in their
                       home port operating area for every month their ship was deployed.

                       As the ratio increases, fewer ships are available in the force to meet
                       forward deployments. Some efficiencies, such as reduced training or
                       maintenance, can be realized in the interdeployment cycle, which can
                       reduce the ratio and increase ship availability for deployments. For
                       example, if a turnaround ratio of 3:1 is maintained, about five ships are
                       needed to keep one ship from Norfolk, Virginia, forward deployed in the
                       Mediterranean Sea. If the ratio is reduced to 2:1, the same presence can be
                       met with four ships. Lower turnaround ratios allow the Navy to deploy
                       more ships within the current force structure for presence but places
                       pressure on the fleet’s ability to train crews and maintain ships.


                       The round-trip distance a ship must travel between its home port and a
Distance, Speed, and   deployment region and the time required for the trip affects ship
Port Visits            employment and the number of ships available for peacetime operations.
                       Longer distances require longer transit times, which reduce the amount of
                       time during a 6-month deployment that a ship will spend in an overseas
                       region. For example, Atlantic Fleet ships generally cross the Atlantic
                       Ocean and arrive in the Mediterranean Sea in about 11 days without stops,
                       or around 22 days round trip. This transit time allows the ship to spend
                       more than 5 months in the region during its deployment. On the other
                       hand, the transit times for the Pacific fleet ships deployed from the West
                       Coast of the United States are much greater to deployment regions. For
                       example, a ship deployed from San Diego, California, to the Arabian Gulf
                       can spend around 34 days in transit without stops, and as much as 45 days
                       if port visits and training exercises en route are included. With a similar
                       time required to return to its home port, the ship would spend about half
                       of its 6-month deployment in the overseas region. These greater distances
                       for Pacific Fleet ships are mitigated somewhat by having 9 surface
                       combatants home ported in Japan and 12 in Hawaii.

                       Similarly, the average speed at which a ship advances toward its
                       destination also affects transit time. The Navy’s standard average speed
                       during peacetime deployments is about 14 knots. Increasing the average



                       Page 82                                GAO/NSIAD-97-57 Navy Surface Combatants
                       Appendix II
                       Operational Factors That Affect How
                       Surface Combatants Are Employed




                       speed would reduce transit time and increase the amount of time spent in
                       an overseas region. According to the Navy, faster speeds can increase
                       maintenance requirements and reduce training time while a ship is
                       underway. Additionally, port visits during transit or return also increase
                       transit time and reduce time in the deployment area.


                       While deployed in a forward area, ships require periodic repairs and
Logistics in Theater   replenishment of fuel, ammunition, and supplies at sea to sustain
                       war-fighting effectiveness. To minimize the risk while operating in
                       high-threat areas during combat, these ships will travel to protected or
                       rear areas for replenishment by combat logistics ships. On the basis of its
                       operational experience, the Navy estimates that about 15 percent of ships
                       deployed in a forward area will be temporarily unavailable while they are
                       being replenished. This in-theater logistics factor is considered in planning
                       the total number of ships required to sustain war-fighting capabilities.
                       Figure II.1 shows the Aegis-capable cruiser U.S.S. San Jacinto (CG-56) and
                       the aircraft carrier U.S.S. Nimitz (CVN-68) conducting underway
                       replenishment operations with the fleet oiler U.S.S. Merrimack (AO-179) in
                       the Arabian Gulf during April 1996.




                       Page 83                                 GAO/NSIAD-97-57 Navy Surface Combatants
                                          Appendix II
                                          Operational Factors That Affect How
                                          Surface Combatants Are Employed




Figure II.2: Underway Replenishment Operations in the Arabian Gulf




                                          Note: The U.S.S. San Jacinto is on the left, the U.S.S. Merrimack is in the center, and the U.S.S.
                                          Nimitz is on the right.

                                          Source: Navy.




                                          Page 84                                               GAO/NSIAD-97-57 Navy Surface Combatants
Appendix III

Comments From the Department of Defense




               Page 85     GAO/NSIAD-97-57 Navy Surface Combatants
                       Appendix III
                       Comments From the Department of Defense




Now on pp. 8, 73-74.




Now on pp. 8, 74.




                       Page 86                                   GAO/NSIAD-97-57 Navy Surface Combatants
Appendix IV

Major Contributors to This Report


                        Carol R. Schuster, Associate Director
National Security and   Richard J. Herley, Assistant Director
International Affairs   Mark J. Wielgoszynski, Evaluator-in-Charge
Division, Washington,   Bob N. Kenyon, Evaluator
                        Karen S. Blum, Communications Analyst
D.C.
                        C. Douglas Mills, Jr., Regional Assignment Manager
Norfolk Field Office    John R. Beauchamp, Evaluator




(701044)                Page 87                               GAO/NSIAD-97-57 Navy Surface Combatants
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