Defense Acquisitions: Challenges Facing the DD(X) Destroyer	 
Program (03-SEP-04, GAO-04-973).				 
                                                                 
The DD(X) destroyer--a surface ship intended to expand the Navy's
littoral warfare capabilities--depends on the development of a	 
number of new technologies to meet its requirements. The Navy	 
intends to authorize detailed design and construction of the	 
first ship in March 2005. GAO's past work has shown that	 
developing advanced systems that rely heavily on new technologies
requires a disciplined, knowledge-based approach to ensure cost, 
schedule, and performance targets are met. Best practices show,  
for example, that a program should not be launched before	 
critical technologies are sufficiently matured--that is, the	 
technology has been demonstrated in its intended environment--and
that a design should be stabilized by the critical design review.
Given the complexity of the DD(X) system and the number of new	 
technologies involved, GAO was asked to describe the Navy's	 
acquisition strategy for DD(X) and how it relates to best	 
practices, and how efforts to mature critical technologies are	 
proceeding.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-973 					        
    ACCNO:   A12098						        
  TITLE:     Defense Acquisitions: Challenges Facing the DD(X)	      
Destroyer Program						 
     DATE:   09/03/2004 
  SUBJECT:   Best practices					 
	     Defense capabilities				 
	     Engineering					 
	     Military systems analysis				 
	     Military vessels					 
	     Naval procurement					 
	     Ships						 
	     Systems design					 
	     Procurement planning				 
	     Procurement practices				 
	     Best practices methodology 			 
	     DD(X) Destroyer					 

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GAO-04-973

                 United States Government Accountability Office

GAO	Report to the Chairman, Subcommittee on Projection Forces,

             Committee on Armed Services, House of Representatives

September 2004

DEFENSE ACQUISITIONS

                 Challenges Facing the DD(X) Destroyer Program

                                       a

GAO-04-973

September 2004

DEFENSE ACQUISITIONS

Challenges Facing the DD(X) Destroyer

Highlights of GAO-04-973, a report to the Program
Chairman of the Subcommittee on
Projection Forces, Committee on Armed
Services, House of Representatives

The DD(X) destroyer-a surface To reduce program risk, the Navy plans to
build and test 10 developmental ship intended to expand the Navy's
subsystems, or engineering development models, that comprise DD(X)'s
littoral warfare capabilities- critical technologies. While using these
models represents a structured and depends on the development of a
disciplined approach, the program's schedule does not provide for the

number of new technologies to meet its requirements. The Navy engineering
development models to generate sufficient knowledge before intends to
authorize detailed design key decisions are made. None of the technologies
in the 10 engineering and construction of the first ship in development
models was proven to be mature when system design began, as March 2005.
best practices advocates. Moreover, the Navy does not plan to demonstrate
DD(X) technology maturity and design stability until after the decision to
GAO's past work has shown that authorize construction of the lead ship,
creating risk that cost, schedule, and developing advanced systems that
performance objectives will not be met. With many of the tests to rely
heavily on new technologies demonstrate technology maturity occurring
around the time of critical requires a disciplined, knowledge-design
review in late fiscal year 2005, there is the risk that additional time
based approach to ensure cost, and money will be needed to address issues
discovered in testing. schedule, and performance targets

are met. Best practices show, for
example, that a program should not DD(X) Lead Ship Schedule
be launched before critical
technologies are sufficiently

matured-that is, the technology Design/Development Preliminary Lead Ship
Critical Design Start Ship Launchhas been demonstrated in its Start Design
Review Authorization Review Fabrication June intended environment-and that
a April 2002 March 2004 March 2005 August 2005 June 2007 2010

design should be stabilized by the Source: GAO analysis of Department of
Defense information.

critical design review. Some of the technologies are progressing according
to the Navy's plans,

Given the complexity of the DD(X) while others have experienced
challenges. Four of the 10 engineering

system and the number of new development models-the total ship computing
environment, the peripheral

technologies involved, GAO was vertical launch system, the hull form, and
the infrared mockups-are

asked to describe the Navy's progressing as planned toward demonstrating
complete subsystems.

acquisition strategy for DD(X) and However, four other models-the
integrated power system, the autonomic

how it relates to best practices, and fire suppression system, the dual
band radar, and the integratedhow efforts to mature critical

technologies are proceeding. deckhouse-have encountered some problems. At
this point, the most

serious appear to be the schedule delay in the dual band radar resulting
from the Navy's decision to change one radar type and the additional
weight of the

integrated power system. The two remaining engineering development
models-the integrated undersea warfare system and the advanced gun GAO is
not making system-are progressing as planned, but will not culminate in
the recommendations in this demonstration of complete subsystems before
being installed on the first

report. Program officials agreed ship. While the Navy has fallback
technologies for the hull form and thewith our assessment of DD(X)

program risks, but believe these integrated power system, it does not have
such plans for the other eight

risks can be mitigated. engineering development models.

www.gao.gov/cgi-bin/getrpt?GAO-04-973.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Paul L. Francis at (202)
512-2811 or [email protected].

                     Preliminary Design System Design Detailed Design and     
                                                      Construction            

Contents

     Letter                                                                 1 
                                          Results in Brief                  2 
                                             Background                     3 
                               Program Strategy Has Good Features but      
                                            Demonstrates                   
                                 Technologies after Key Commitments         4 
                            Some DD(X) Development Models Progressing as   
                                           Planned by the                  
                              Navy; Others Are Experiencing Challenges      8 
                                           Agency Comments                 11 
Appendixes                                                              
               Appendix I:      DD(X) Engineering Development Models       14 
              Appendix II:     Comments from the Department of Defense     24 

Tables	Table 1: Description of Engineering Development Models 5 Table 2:
Engineering Development Model Test Schedule 9

Figure Figure 1: DD(X) Lead Ship Schedule of Events

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.

A

United States Government Accountability Office Washington, D.C. 20548

September 3, 2004

The Honorable Roscoe G. Bartlett
Chairman
Subcommittee on Projection Forces
Committee on Armed Services
House of Representatives

The DD(X) destroyer is a surface ship intended to expand the Navy's land
attack and littoral warfare capabilities. The program is currently in the
system design phase and the Navy plans to authorize detailed design and
construction of the lead ship in March 2005. A number of technology
advancements are necessary for the DD(X) to meet its requirements.
The Navy plans to demonstrate the technologies by building and testing
10 developmental subsystems, referred to as engineering development
models.

In response to your February 26, 2004, request, we assessed the DD(X)
program's acquisition strategy and technology maturation efforts, and
briefed your staff on May 18, 2004. As agreed in that meeting, we have
prepared this report, which updates and further explains the information
briefed. This letter addresses: (1) the program's strategy for maturing
technologies and how it compares to best practices and (2) how efforts to
mature critical technologies are proceeding.

To assess the program's strategy for maturing technologies, we reviewed
the program's acquisition strategy, test and evaluation master plan, and
other relevant documents and information. We also drew on our prior work
on best practices in developing complex systems. To address the progress
of technology development efforts, we analyzed reviews of current test
activities and design assessments, cost performance reports, and other
program information. We also met with program officials including those
leading each of the engineering development models. In addition, we met
with officials of companies under contract to design DD(X), including the
prime contractor, Northrop Grumman Ship Systems, and several of its
subcontractors. We compared data obtained from various documents and
program officials against each other to ensure data reliability. We
conducted our work from April 2004 to July 2004 in accordance with
generally accepted government auditing standards.

Results in Brief	The engineering development models used by the program to
mature technologies and reduce risk represent a structured and disciplined
approach. The models generally call for designing, developing, and testing
the DD(X) subsystems that house the key technologies before ship
construction begins. Formal risk assessments and risk reduction strategies
are an element of each model. However, the program's schedule does not
provide for the models to demonstrate high levels of maturity when needed.
Best practices call for demonstrating technologies before entering system
design and stability of system design before proceeding with production.
None of the 10 engineering development models were demonstrated when
system design began. DD(X) technology maturity and design stability will
not be demonstrated before the decision to authorize construction of the
lead ship, creating risks for establishing and meeting realistic cost,
schedule, and performance objectives. With many of the tests to
demonstrate technology maturity occurring around the time of critical
design review in late fiscal year 2005, there is a risk that additional
time and money will be necessary to address issues discovered in testing.
Program officials acknowledge the risks associated with the advanced
technologies, but believe that taking such risks is warranted to ensure
that DD(X) technologies are not obsolete and that they have taken adequate
steps to mitigate the risks before ship construction begins.

Of the 10 engineering development models, four are progressing as planned
toward demonstrating complete subsystems, including the total ship
computing environment, the peripheral vertical launch system, the hull
form, and the infrared mockups. Four models have encountered some
problems, including the integrated power system, the autonomic fire
suppression system, the dual band radar, and the integrated deckhouse. At
this point, the most serious appear to be the schedule delay in the radar
resulting from the Navy's decision to change one radar type and the
additional weight of the integrated power system. The two remaining
engineering development models-the integrated undersea warfare system and
the advanced gun system-are progressing as planned, but will not culminate
in the demonstration of complete subsystems before being installed on the
first ship. The Navy does have backup approaches as a contingency for the
hull form and the integrated power system, but not for the other
engineering development models.

Background	The DD(X) destroyer is a multimission surface ship designed to
provide advanced land attack capability in support of forces ashore and
contribute to U.S. military dominance in littoral operations. Among its
planned features is the ability to engage land targets from long ranges
using its 155-millimeter guns and Tomahawk land attack cruise missiles.
The ship will also feature reduced radar, acoustic, and heat signatures to
increase survivability in the littorals. In November 2001, the Navy
restructured the program to focus on developing and maturing a number of
transformational technologies. These technologies will provide a baseline
to support development of a range of future surface ships such as the
future cruiser and the Littoral Combat Ship.

The DD(X) program is managing risk by designing, developing, and testing
10 engineering development models for the program's critical technologies.
Each of the 10 engineering development models represents an experimental
subsystem of DD(X) and may incorporate more than one transformational
technology.

The key events in the DD(X) schedule are shown in figure 1.

                  Figure 1: DD(X) Lead Ship Schedule of Events

    Preliminary Design    System Design    Detailed Design and Construction   

Design/Development Preliminary Lead Ship Critical Design Start Ship Launch
Start Design Review Authorization Review Fabrication June April 2002 March
2004 March 2005 August 2005 June 2007 2010

           Source: GAO analysis of Department of Defense information.

The program completed its system-level preliminary design review
March 2004 and is currently in system design. The next major event occurs
in March 2005, when the Navy will seek authority to commit research,
development, test and evaluation funds for detailed design and
construction of the lead ship. The program's system-level critical design
review will be held late in fiscal year 2005 after the lead ship
authorization
and will assess design maturity. The current contract for design and
development of DD(X) ends in September 2005. Further design and
development activities, including detailed design and construction, will
take place under a new contract to be awarded in March 2005.

The Conference Report to the fiscal year 2005 Defense Appropriations Act
states that the funds appropriated for DD(X) in the act are limited to
design
and advanced procurement requirements for the first two ships. The
Conference Report further directs that no funds are available for the
procurement of materials dependent upon delivery of key DD(X)
technologies unless those technologies have undergone testing. The
Conference Report also states that the Navy should complete land-based
testing of the advanced gun system and integrated power system prior to
the completion of the critical design review.1

Program Strategy Has The Navy is developing 12 technologies for DD(X)
using 10 engineering

development models. Engineering development models seek toGood Features
but demonstrate key DD(X) subsystems and may involve more than one
critical Demonstrates technology (see table 1).

Technologies after Key

Commitments

1 H.R. CONF. REP. NO. 108-622, at 188 and 310 (2004).

             Table 1: Description of Engineering Development Models

Engineering development models Description

Advanced Gun System	Will provide long-range fire support for forces ashore
through the use of unmanned operations and the long-range land attack
projectile.

Autonomic Fire Suppression System	Intended to reduce crew size by
providing a fully automated response to fires.

Dual Band Radar	Horizon and volume search improved for performance in
adverse environments.

Hull Form	Designed to significantly reduce radar cross section.

Infrared Mockup	Seeks to reduce ship's heat signature in multiple areas.

Integrated Deckhouse and Apertures	A composite structure that integrates
apertures of radar and communications systems.

Integrated Power System	Power system that integrates power generation,
propulsion, and power distribution and management.

Integrated Undersea Warfare System	System for mine avoidance and submarine
warfare with automated software to reduce workload.

Peripheral Vertical Launch System	Multipurpose missile launch system
located on the periphery of the ship to reduce damage to

a

                                 ship systems.

Total Ship Computing Environment	Provides single computing environment for
all ship systems to speed command while reducing manning.

Source: DD(X) program office and contractors.

aThe Navy refers to both the enclosure for the launcher and the full
subsystem as the Peripheral Vertical Launch System.

The engineering development models are the most significant aspect of the
program's risk reduction strategy. To demonstrate technologies, each DD(X)
development model follows a structured approach for design, development,
and testing. Initially, requirements for each of the development models
are defined and recorded in a common database. The risk of not meeting
these requirements is assessed and strategies are formulated to reduce
these risks. Once designs are formulated, components are tested to build
knowledge about a subsystem's viability. In testing, the performance of
engineering development models is confirmed. It is these tests that
provide confidence in a technology's ability to operate as intended. Once
the technology is demonstrated, the subsystem can be integrated into the
ship's system design.

Our reviews of commercial and Department of Defense acquisition programs
have identified a number of specific practices that ensure that high
levels of knowledge are achieved at key junctures in development and used
to make investment decisions.2 The most important practice is achieving a
high level of technology maturity at the start of system development. A
technology reaches full maturity when its performance is successfully
demonstrated in its intended environment. Maturing a technology to this
level before including it into system design and development can reduce
risk by creating confidence that a technology will work as expected and
allows the developer to focus on integrating mature technologies into the
ship design. This improves the ability to establish realistic cost,
schedule, and performance objectives as well as the ability to meet them.
Including the technologies in system development before reaching maturity
raises the risk of discovering problems late that can increase the cost
and time needed to complete design and fabrication.

The Navy's use of engineering development models to mature DD(X)
technologies represents a disciplined process for generating the
information needed for development, and corresponds with portions of the
best practices approach. In using engineering development models, the Navy
seeks to achieve high levels of technology maturity by first defining the
requirements and risks of a developmental technology and then executing a
series of tests to reduce these risks and prove the utility of a
technology in its intended environment. The progress of technology
maturity is recorded and communicated clearly through the use of
established metrics, affording the program manager and others readily
available information for use in decision making.

The program's schedule, however, does not allow most engineering
development models to generate sufficient knowledge before key decisions
are made. None of the DD(X) technologies included in the 10 engineering
development models were mature at the start of system design and none are
expected to be mature at the March 2005 decision to authorize detailed
design and construction of the lead ship. Under the current schedule, 7 of
the 10 subsystems will not be demonstrated until the end of program's
critical design review in August 2005 or beyond. The decision to authorize

2 For more information see GAO, Best Practices: Better Management of
Technology Development Can Improve Weapon System Outcomes,
GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999) and Best Practices:
Capturing Design Manufacturing Knowledge Early Improves Acquisition
Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002).

award of the contract for detail design and construction of the lead ship
will thus be made before the technologies are proven and the design is
stable. By the end of the critical design review, only three subsystems
are expected to have completed testing: the autonomic fire suppression
system, the hull form, and the infrared mockups. The integrated power
system, peripheral vertical launch system, and total ship computing
environment complete testing just after the critical design review. The
remaining four subsystems complete testing well after critical design
review or are not tested as fully integrated systems until after
installation on the first ship. The Navy is aware of the risks presented
by its schedule but stated that exit criteria have been established for
milestone decisions which ensure requirements will be met. Program
officials further stated that, according to the Department of Defense
acquisition policy, technologies for ships do not have to be mature until
shipboard installation.

Our reviews of commercial best practices identified a second critical
practice that increases a program's chances of success: achieving design
stability by the system-level critical design review. For a stable design,
subsystems are integrated into a product that meets the requirements of
the user. Design stability requires detailed knowledge of the form, fit,
and function of all technologies as well as the integration of individual,
fully matured subsystems. Stability of design allows for testing to prove
system reliability and leads into production planning.

Most of the testing of the engineering development models will take place
in the months immediately before and after critical design review and
beyond. Even if the models proceed with complete success, they will not be
done in time to achieve design stability at the critical design review. If
problems are found in testing-as has been the case with other programs-
they could result in changes in the design, delays in product delivery,
and increases in product cost.3 Detailed knowledge about subsystems and
their component technologies is necessary for developing the system
design. If this information is not available and assumptions about
operating characteristics have to be made, redesign may be necessary when
reliable information becomes available. This can increase the schedule and
the costs of system design. Unstable system design could also affect

3 See GAO, Defense Acquisitions: The Army's Future Combat Systems'
Features, Risks, and Alternatives, GAO-04-635T (Washington, D.C.: Apr. 1,
2004).

construction. Higher construction costs are likely to be incurred if work
is done inefficiently or if changes result in rework.

One example of the consequences of technology and design immaturity
already apparent in the DD(X) program is the development of the dual band
radar and its impact on the integrated deckhouse. The dual band radar
consists of two separate radar technologies and will not complete testing
until fiscal year 2008. Due to this lengthy period of testing, the dual
band radar may not be installed until the first ship is afloat.
Contractors have stated that this schedule has led to the need for
increased funding. Because the dual band radar will not be fully tested by
critical design review, program officials have had to make some
assumptions about where in the deckhouse it will be placed. If the weight
of the radar increases or if other technical factors cause it to be
relocated, a redesign effort may be needed to assure that requirements are
met. As the deckhouse forms a significant portion of the DD(X), redesign
could have an impact on the ship as a whole.

Other shipbuilding programs have developed strategies that call for
maturing critical technologies while still providing decision makers with
relatively high levels of knowledge at key decision points. For example,
the CVN-21 future aircraft carrier program has a risk reduction strategy
that defines a timeline for making decisions about a technology's
maturity. The majority of these decisions are made early in the system
design phase prior to the system critical design review. This should allow
the system design to proceed in integrating technologies with the
assurance that they will work in their intended environment. Lead ship
authorization occurs after critical design review so that the maturity of
the design can be demonstrated before a decision is made.

  Some DD(X) Development Models Progressing as Planned by the Navy; Others Are
  Experiencing Challenges

The DD(X) program entered its system design phase without the majority of
its technologies completing their design or component testing stage. These
activities include events like design reviews for the integrated power
system and damage testing on components of the peripheral vertical launch
system. The only development model beyond these initial stages is the hull
form, which has completed its initial tests and simulations and is now
entering a second design and test phase.

Testing subsystems to demonstrate whether they will work in their intended
environment is scheduled to begin for most development models

in fiscal year 2005 and will continue, in some cases, beyond fiscal year
2006, as shown in table 2.

  Table 2: Engineering Development Model Test Schedule Engineering development
 model Begin testing End testing Advanced Gun System Dual Band Radar Peripheral
                             Vertical Launch System

Advanced Gun System                       June 2005            August 2005 
Long Range Land Attack Projectile       September 2004      September 2005 
Integrated Systema                            -                  -         
Autonomic Fire Suppression System        January 2005          August 2005 

Multi-Function Radar                     October 2004       April 2006     
Volume Search Radar                     September 2006       June 2007     
Integrated System                         August 2007         January 2008 
Hull Form                                 August 2003        July 2004     
Infrared Mockup                           March 2005         July 2005     
Integrated Deckhouse and Apertures       February 2005      June 2005b     
Integrated Power System                    July 2005        September 2005 
Integrated Undersea Warfare System     c                         c         

Advanced Vertical Launch System (Launcher) May 2005 September 2005

Peripheral Vertical Launch System (Enclosure) March 2005 May 2005
Integrated System May 2005 May 2005

Total Ship Computing Environment August 2005 September 2005 Source: DD(X)
program office and contractors. aTests using both the gun system and
projectile are not performed until after ship installation.

bTests with volume search portion of dual band radar are not performed
under the current contract.

cTests of the undersea warfare system to demonstrate components will occur
between May 2004 and December 2005 the full system will not be
demonstrated until after ship installation.

Four of the 10 engineering development models-the total ship computing
environment, the peripheral vertical launch system, the hull form, and the
infrared mockups-are progressing as planned toward demonstrating complete
subsystems. However, challenges have arisen with other development models.
The impact of some of these challenges has been mitigated with minimal
change to the program, but others remain unresolved or have resulted in
rescheduling and cost growth. Only two of the engineering development
models, the hullform and the integrated

power system, have fallback technologies that could be used if current
technologies do not meet requirements. All other engineering development
models could necessitate system level redesign if they fail to mature
technologies to meet requirements. We have already noted the challenges
with the dual band radar and its impact on the integrated deckhouse. Other
challenges are highlighted below. Program officials agreed with our
assessment of DD(X) program risks, but believe these risks can be
mitigated through use of fallback technologies and design budgeting.
Design budgeting refers to the practice of building in extra margins, such
as weight and space, to accommodate growth as the design matures. Appendix
I provides details on the status of all 10 engineering development models.

The integrated power system is currently exceeding its weight allowances
by a significant amount and has used up its entire additional design
margin for weight. This means that any further increases in weight could
affect other systems or result in an unplanned and unbudgeted weight
reduction program. The power system has also experienced some software
compliance issues with the total ship computing environment. Program
officials have defined the software issue and are working toward a
solution. In addition, the testing schedule for the power system has been
altered due to changes to the dual band radar. Program officials had
planned to test the two subsystems together in at-sea tests on a surrogate
vessel. When the delays in testing for dual band radar occurred, at-sea
tests for the power system were cancelled. To compensate for the loss of
knowledge that was to be gained by this testing, the program office plans
for increased fidelity in land based testing. Plans for the integrated
power system do include the use of a fallback technology. Use of the
technology would require some trade-offs in performance, weight, and noise
requirements. In their comments on this report, the Department of Defense
stated that the Navy has allocated additional margin from the total ship
design to account for weight growth in the integrated power system. While
this adjustment in overall ship margin does not directly impact the
overall ship design, it may leave less space for future growth in other
systems.

While the early tests of the autonomic fire suppression system exceeded
expectations, by sustaining significant damage and still controlling the
fire, some challenges have arisen that delayed later testing. Like the
power system, the fire suppression system experienced compatibility issues
with the total ship computing environment. These issues have been
recognized and the program office has identified solutions to resolve
them. These

software compatibility issues caused a delay in the system tests that
pushed their completion beyond the system-level critical design review.

The current testing plans for the integrated undersea warfare system
include testing of the dual frequency sonar array for internal
interference, the ability of the high frequency portion of this array to
detect mines, and the software necessary to integrate all functions and
reduce the sailor's workload. Though these tests may prove the
functionality of components and technologies within the undersea warfare
system, they do not demonstrate the system as a whole. As a result, when
the current series of testing concludes in May 2005, the undersea warfare
system will not have demonstrated operations in the intended environment.

While development of the advanced gun system is proceeding as planned and
has even overcome early challenges in design and development, the current
plans do not include fully demonstrating the maturity of the subsystem.
Land based testing of the gun system, including the automated mount and
magazine, is planned for the summer of 2005 and flight tests for the
munition are set to complete in September of 2005. However, the two
technologies will not be tested together until after ship installation.
Program officials cited lack of adequate test facilities as the reason for
the separate tests.

Agency Comments	In commenting on a draft of this report, DOD stated that
it is appropriate to undertake a reasonable amount of risk in the DD(X)
lead ship, given the long production lead time in shipbuilding. It noted
that the DD(X) risk mitigation approach represents the management of
finite resources to achieve innovation and to implement a cost effective
test plan designed to address those risks. DOD stated that the DD(X)
schedule supports readiness of all the engineering development models in
time for ship installation, which for shipbuilding programs, is the most
relevant point of reference for technology maturity as DOD policy
indicates technologies for ships do not have to be mature until that time.
DOD concluded that the DD(X) engineering development models are on track
to support a milestone B decision in March 2005 to authorize the lead ship
and to achieve maturity prior to installation. DOD pointed out that it had
selected exit criteria for that decision to provide for assessments of
critical technologies and that results of all required tests will be
available for the decision. DOD made specific comments on individual
engineering development models, which we address elsewhere in the report.

As noted in the draft report, we believe the approach the Navy has taken
to demonstrate DD(X) technologies through the engineering development
models is both structured and disciplined. However, the short amount of
time between lead ship authorization and ship launch (5 years and 3
months), together with the fact that virtually every major subsystem on
the ship depends on a new technology or novel use of existing
technologies, frame a challenge that involves significant risk. While
tests on some key subsystems are scheduled to be conducted by the
milestone B decision, these tests are to demonstrate the functionality of
components but not the subsystems. Thus, the full demonstration of
technology maturity and the resolution of unknowns will continue beyond
the milestone decision. Our past work on best practices has shown that
technological unknowns discovered later in product development lead to
cost increases and schedule delays. Two key factors that can mitigate the
effect of such risks-time in the schedule to address problems and the
availability of backup technologies-are largely unavailable for the DD(X)
program. While DOD policy allows for technologies to mature up to the
point of ship installation, it does not necessarily follow that this is a
best practice. In fact, DD(X) will proceed from the start of development
to initial capability in about the same time as other non-shipbuilding
systems for which DOD does call for demonstration of technology maturity
before development start.4

We plan to provide copies of this report to the Senate Armed Services
Committee; the Senate Committee on Appropriations, Subcommittee on
Defense; and the House Committee on Appropriations, Subcommittee on
Defense. We also will provide copies to the Director, Office of Management
and Budget; the Secretary of Defense; and the Secretary of the Navy. We
will make copies available to others upon request.

4 Examples include the F/A-22 Raptor (14.5 years), the Joint Strike
Fighter (10 years 5 months to 11 years 5 months), and the Expeditionary
Fighting Vehicle (7 years 9 months). DD(X) will take 8 years and 2 months.

If you or your staff have any questions concerning this report, please
contact me on (202) 512-4841; or Karen Zuckerstein, Assistant Director, on
(202) 512-6785. Major contributors to this report are J. Kristopher
Keener, Angela D. Thomas, and Karen Sloan.

Sincerely yours,

Paul L. Francis Director, Acquisition and Sourcing Management

                                   Appendix I

                      DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

Appendix I DD(X) Engineering Development Models

                                  Appendix II

                    Comments from the Department of Defense

Note: GAO comments supplementing those in the report text appear at the
end of this appendix.

Appendix II
Comments from the Department of Defense

See comment 1.

Now on p. 9. See comment 2.

Now on p. 2.

Now on p. 6.

Appendix II
Comments from the Department of Defense

Now on p. 10.

See comment 3.

Now on p. 11.

Now on p. 8. See comment 4.

Now on p. 8.

Appendix II
Comments from the Department of Defense

                                 Now on p. 10.

                                 Now on p. 11.

                                  Appendix II
                    Comments from the Department of Defense

GAO Comments	The following are GAO's comments on the Department of
Defense's letter dated August 20, 2004.

1. Change to the ship schedule incorporated into the body of the report.

2.	The period from February to July includes only testing of the permanent
magnet motor, one component of the integrated power system. The date in
the report was changed to July 2005 to reflect the beginning of full
system testing of the integrated power system.

3.	This is not a GAO conclusion. The statement is based on statements
provided by the Navy as well as industry contractors.

4.	Our discussion of the technology and design maturity of the dual band
radar and the integrated deckhouse deals with the impact of the Navy's
decision to change radar frequency, not the reason for the decision.

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