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TITLE I — Procurement

House Conference Report 109-360

SEC. 125. PROHIBITION ON ACQUISITION OF NEXT-GENERATION DESTROYER THROUGH A SINGLE SHIPYARD.

(a) Prohibition- The Secretary of the Navy may not acquire vessels under the next-generation destroyer program through a winner-take-all acquisition strategy.

(b) Prohibition on Use of Funds- The Secretary of the Navy may not obligate or expend any funds to prepare for, conduct, or implement a strategy for the acquisition of vessels under the next-generation destroyer program through a winner-take-all acquisition strategy.

(c) Winner-Take-All Acquisition Strategy Defined- In this section, the term `winner-take-all acquisition strategy', with respect to the acquisition of vessels under the next-generation destroyer program, means the acquisition (including design and construction) of such vessels through a single shipyard.

(d) Next-Generation Destroyer Program- In this section, the term `next-generation destroyer program' means the program to acquire and deploy a new class of destroyers as the follow-on to the Arleigh Burke class of destroyers.

The Senate amendment contained a provision (sec. 121) that would prohibit the acquisition of the next-generation destroyer (DD(X)) through a winner-take-all acquisition strategy. The provision would also prohibit the obligation or expenditure of funds for the purpose of pursuing a winner-take-all acquisition strategy. The provision would define a winner-take-all acquisition strategy as one leading to the acquisition, including both design and construction, of the next-generation of destroyers through a single shipyard.

The House bill contained no similar provision.

The House recedes with an amendment that would not specify the DD(X) as the next-generation destroyer, but instead define the next-generation destroyer program as that which will acquire and deploy a new class of destroyers as the follow-on to the Arleigh Burke-class of destroyers.

Senate Report 109-069

The committee recommends a provision that would prohibit a winner take all acquisition strategy for the next generation destroyer (DD(X)) program. The provision would define a winner take all acquisition strategy, in relation to this program, as one which would procure, including design and construction, these destroyers through a single shipyard.

In the Future Years Defense Program (FYDP) presented with the fiscal year 2005 budget request, construction of more than one DD(X) a year was to have started in fiscal year 2007. The FYDP presented with the fiscal year 2006 budget request indicates that only one DD(X) a year will be procured in each year from fiscal years 2007 through 2011. This reduced procurement profile represents at least the third significant change for the DD(X) program in recent years. Additionally, the Secretary of the Navy has recently delivered an interim long-range plan for the construction of Naval vessels to Congress. This plan outlines a range of needed ships, with eight to 12 DD(X) destroyers establishing the range for that ship.

The committee is aware that the Navy has proposed a change in acquisition strategy for DD(X) due to the reduced procurement profile. The proposed change is to conduct a winner-take-all competition for the DD(X)-class of ships between the two shipyards which build surface combatants.

The committee is concerned with the sharp decline projected in the number of ships in the Navy, the low number of major combatants scheduled for construction, and the negative consequences for the U. S. shipbuilding industrial base that could result if a winner-take-all strategy for DD(X) were pursued. The committee believes that there is an unacceptable risk if the shipbuilding industry sizes itself to where only one surface combatant a year is being built. The committee urges the Navy to plan to build more than one major surface combatant ship a year as soon as possible. If fewer DD(X) destroyers are required, then acceleration of the follow-on surface combatant, the CG(X), should be pursued.

Elsewhere in this report, the committee recommends additional funding for advance procurement of the second DD(X) destroyer at the second shipyard.