Surface Combatants: Navy Faces Challenges Sustaining Its Current Program
(Chapter Report, 05/21/97, GAO/NSIAD-97-57).

The Navy now spends about $3 billion each year to modernize its surface
combatant force. The high costs of these ships, especially the $870
million price tag for each Arleigh Burke destroyer, raises questions
about the Navy's ability to sustain this force level. The Navy's plan to
build and maintain a fleet of 125 cruisers, destroyers, and frigates
through the year 2013 hinges on optimistic assumptions about future
defense budgets and ship construction schedules. Moreover, the Navy has
yet to explain how this force level relates to the national defense
strategy of fighting two nearly simultaneous regional conflicts.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-97-57
     TITLE:  Surface Combatants: Navy Faces Challenges Sustaining Its 
             Current Program
      DATE:  05/21/97
   SUBJECT:  Military vessels
             Naval warfare
             Naval procurement
             Future budget projections
             Defense contingency planning
             Defense capabilities
             Military downsizing
             Construction costs
             Shipbuilding industry
IDENTIFIER:  U.S.S. Arleigh Burke
             21st Century Surface Combatant
             Arsenal Ship
             DOD Bottom-Up Review
             DOD Future Years Defense Program
             Oliver Hazard Perry Class Frigate
             Spruance Class Destroyer
             Kidd Class Destroyer
             Aegis Weapon System
             Navy Cooperative Engagement Capability System
             Ticonderoga Class Cruiser
             Navy Vertical Launching System
             Tomahawk Cruise Missile
             BGM-109 Missile
             Standard Surface-to-Air Missile
             AN/SPY-1 Radar
             DDG-61 Destroyer
             DDG-66 Destroyer
             JCS National Defense Strategy
             DOD Quadrennial Defense Review
             Persian Gulf War
             FYDP
             
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Cover
================================================================ COVER


Report to Congressional Committees

May 1997

SURFACE COMBATANTS - NAVY FACES
CHALLENGES SUSTAINING ITS CURRENT
PROGRAM

GAO/NSIAD-97-57

Navy Surface Combatants

(701044)


Abbreviations
=============================================================== ABBREV

  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

Letter
=============================================================== LETTER


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
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

The Navy currently spends about $3 billion each year to modernize its
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. 


--------------------
\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. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Surface combatants--cruisers, destroyers, and frigates--provide the
Navy 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 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           16    26    27        27    27        27    27    27
 cruisers\a
Arleigh Burke-class          0     2    16        28    37        46    51    57
 destroyers
================================================================================
Total for Aegis-capable     16    28    43        55    64        73    78    84
 surface combatants
================================================================================
Percentage of surface        8    19    34        43    49        54    57    59
 combatants that are
 Aegis capable
================================================================================
Total for all surface      199   148   125       127   130       136   137   142
 combatants
--------------------------------------------------------------------------------
\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. 


--------------------
\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. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

The Department of Defense (DOD) and the Navy are pursuing a surface
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. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      BASIS FOR THE SURFACE
      COMBATANT FORCE HAS NOT BEEN
      CLEARLY EXPLAINED
-------------------------------------------------------- Chapter 0:4.1

The post-Cold War Bottom-Up Review concluded that a Navy comprised of
346 battle force ships\4 would be sufficient to carry out the U.S. 
military 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. 


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


      NAVY FACES CHALLENGES IN
      SUSTAINING ITS FORCE
-------------------------------------------------------- Chapter 0:4.2

The Navy will retire a large number of its older surface combatants
as they 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 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 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 AFFECT
      FUTURE FORCE LEVELS
-------------------------------------------------------- Chapter 0:4.3

Several upcoming DOD and Navy decisions are likely to affect the
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 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. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

GAO recommends that the Secretary of Defense provide Congress with
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. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

DOD concurred with the information in this report and the
recommendation.  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, 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. 


INTRODUCTION
============================================================ Chapter 1

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. 

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

   (See figure in printed
   edition.)

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 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. 

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

   (See figure in printed
   edition.)

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.  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. 



                                                                      Table 1.1
                                                       
                                                           Selected Capabilities of Surface
                                                                  Combatant Classes

                                  Number of        Initial    Approximate
                                ships as of    operational   date of last    Full-load                                          Embarked
                                  Sept. 30,     capability  ship in class  displacemen  Major combat                            helicopter  Number of
Class\a                                1996           date      retired\b       t tons  system         Major weapon systems     aircraft    VLS cells
----------------------------  -------------  -------------  -------------  -----------  -------------  -----------------------  ----------  ---------
Cruiser

Ticonderoga (CG-47)\c                    22           1986           2029        9,600  Aegis          Tomahawk missile         2 SH-             122
                                                                                                       Standard missile         60B\s
                                                                                                       Antisubmarine rocket
                                                                                                       MK-46 torpedo
                                                                                                       MK-45 5"/54 caliber
                                                                                                       lightweight gun
                                                                                                       Phalanx close-in weapon
                                                                                                       system

Ticonderoga (CG-47)--                     5           1983           2022        9,600  Aegis          Standard missile         2 SH-               0
without VLS\d                                                                                          Harpoon missile          60B\s or
                                                                                                       Antisubmarine rocket     2 SH-
                                                                                                       MK-46 torpedo            2Fs\d
                                                                                                       MK-45 5"/54 caliber
                                                                                                       lightweight gun
                                                                                                       Phalanx close-in weapon
                                                                                                       system

Virginia (CGN-38)                         2           1976           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

California (CGN-36)                       2           1974           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

Destroyer

Arleigh Burke (DDG-51)                   16           1991           2045        8,300  Aegis          Tomahawk missile         Planned\e        90\e
                                                                                                       Standard missile
                                                                                                       Harpoon missile\e
                                                                                                       MK-46 torpedo
                                                                                                       MK-45 5"/54 caliber
                                                                                                       lightweight gun
                                                                                                       Phalanx close-in weapon
                                                                                                       system\e

Kidd (DDG-993)                            4           1981           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

Spruance (DD-963)                        31           1975           2018        9,100  NATO Sea       Tomahawk missile         2 SH-60Bs          61
                                                                                        Sparrow        Harpoon missile
                                                                                        Surface        NATO Sea Sparrow
                                                                                        Missile        missile
                                                                                        System         Antisubmarine rocket
                                                                                                       MK-46 torpedo
                                                                                                       MK-45 5"/54 caliber
                                                                                                       lightweight gun
                                                                                                       Phalanx close-in-
                                                                                                       weapon system

Frigate

Oliver Hazard Perry (FFG-7)            43\f           1977           2018        4,100  Other          Standard missile         2 SH-60Bs           0
                                                                                                       Harpoon missile          or
                                                                                                       MK-46 torpedo            1 SH-2F\g
                                                                                                       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 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). 

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

   (See figure in printed
   edition.)

   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.

   (See figure in printed
   edition.)

   Source:  Navy.

   (See figure in printed
   edition.)

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 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. 


--------------------
\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. 

\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. 

\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. 

\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. 

\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. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:1

We initiated a review of the Navy's plans and assessments for the
size, mix, and capability of its future surface combatant force as
part of our 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 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 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


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. 


SURFACE COMBATANT PROGRAM IS NOT
CLEARLY LINKED TO THE NATIONAL
MILITARY STRATEGY
============================================================ Chapter 2

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. 


--------------------
\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. 


   REVISED DEFENSE STRATEGIES HAVE
   REDUCED THE SIZE OF THE SURFACE
   COMBATANT FORCE
---------------------------------------------------------- Chapter 2:1

During the 1980s, the Navy pursued a 600-ship force goal as part of
its maritime strategy to prepare for a global war against the former
Soviet Union.  This goal included 238 surface combatants.  In August
1990, the President announced a shift in U.S.  defense strategy from
a Soviet threat to major regional conflicts (MRC) against uncertain
adversaries.  The following year, DOD proposed a "base force" plan to
reflect the new 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 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      Base Force  Bottom-Up Review   Current program
                    Strategy                                                plan
Date of              FY 1988         FY 1991           FY 1993           FY 1998
 plan
Number                   238             150                \a             131\b
 of
 surface
 combata
 nts
Total                    600       About 450               346           330-346
 number
 of
 battle
 force
 ships
Goal               Mid-1990s         FY 1995           FY 1999           FY 2003
 achieve
 ment
 date
--------------------------------------------------------------------------------
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. 

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. 


--------------------
\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. 


   CURRENT STRATEGY CALLS FOR
   FIGHTING TWO CONFLICTS
---------------------------------------------------------- Chapter 2:2

Current U.S.  military strategy requires that the military be
prepared to fight and decisively win two nearly simultaneous MRCs.\4
However, the strategy specifies a number for aircraft carriers and
attack submarines but 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. 

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


--------------------
\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. 

\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. 


   FORWARD DEPLOYED SHIPS HELP
   SATISFY CRISIS RESPONSE AND
   PRESENCE MANDATES
---------------------------------------------------------- Chapter 2:3

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

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. 

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

   (See figure in printed
   edition.)

   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.

   (See figure in printed
   edition.)

   Source:  Navy.

   (See figure in printed
   edition.)

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.  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. 


--------------------
\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. 


   FORWARD PRESENCE IS A KEY
   COMPONENT OF DEFENSE STRATEGY
---------------------------------------------------------- Chapter 2:4

In addition to providing a means to respond rapidly to a crisis, the
Navy forward deploys ships to carry out other U.S.  strategic
objectives, such as providing stability and deterrence.  Surface
combatants and other naval 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. 

   Figure 2.2:  Peacetime Presence
   Operations of Surface
   Combatants

   (See figure in printed
   edition.)

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. 



                                    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 capability
                                          --------------------------
                                   Total                               Number of
                               number of                                embarked
                                 surface   Aegis            Tomahawk  helicopter
Carrier battle group          combatants  combat              cruise     s among
configuration                   in group  system     VLS   missile\a       ships
----------------------------  ----------  ------  ------  ----------  ----------
Navy notional                          6       3       4           4          10
Atlantic Fleet\b                       6     2-3     2-5         2-5         7-9
Pacific Fleet\c                      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. 


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


   FORCE SIZE VARIES WIDELY BASED
   ON ASSUMPTIONS
---------------------------------------------------------- Chapter 2:5

DOD and Navy studies illustrate that the size force needed to meet
Navy presence and war-fighting requirements is highly dependent on
the assumptions made.  For example, in its August 1994 assessment,
Naval 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.  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 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. 


--------------------
\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. 


NAVY CAN SUSTAIN ITS CURRENT FORCE
SIZE THROUGH 2013
============================================================ Chapter 3

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. 


--------------------
\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. 


   SHIP RETIREMENTS COULD AFFECT
   FUTURE SURFACE COMBATANT
   REQUIREMENTS
---------------------------------------------------------- Chapter 3:1

The Navy's current shipbuilding plan through fiscal year 2003
supports continued procurement of the Arleigh Burke-class destroyer
and the introduction of the 21st Century Surface Combatant.  The Navy
is procuring about three Arleigh Burke-class 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.\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        2     4     3     3     3     3     1     2
 destroyers
Number of 21st Century Surface       0     0     0     0     0     0     0   1\a
 Combatants
Number of other new ships\b          3     2     1     2     2     3     4     3
================================================================================
Total new construction ships         5     6     4     5     5     6     5     6
Approximate fiscal year of        2001  2002  2003  2004  2005  2006  2007  2008
 delivery for new destroyers
Surface combatant force level      126   130   131   133   136   140   137   135
 after delivery\c
--------------------------------------------------------------------------------
\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 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

   (See figure in printed
   edition.)

Source:  Our analysis of Navy data. 

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

   (See figure in printed
   edition.)

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

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. 


--------------------
\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. 

\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. 


   RETAINING SHIPS LONGER HELPS TO
   MITIGATE NEW CONSTRUCTION
   REQUIREMENTS
---------------------------------------------------------- Chapter 3:2

Determining the useful service lives of ships is a major factor in
planning and budgeting for future force levels.  The estimates of
expected service lives are used to help determine the rate at which
new ships must be 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 ships are retired earlier than
anticipated, the Navy must adjust its 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. 



                               Table 3.2
                
                   Historical Service Lives for Navy
                Surface Combatants Built After World War
                                   II

                           (Figures in years)

                                             Ship as         Ship with
Ship type                                      built          upgrades
--------------------------------------  ------------  ----------------
Cruiser                                        14-22             27-30
Destroyer                                      15-20             29-30
Frigate                                        21-22                \a
----------------------------------------------------------------------
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
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. 


--------------------
\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. 


      SERVICE LIFE ASSUMPTIONS
      AFFECT FUTURE FORCE PLANS
-------------------------------------------------------- Chapter 3:2.1

The length of estimated service life used for ships in the force has
a 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),

  -- 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. 

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

   (See figure in printed
   edition.)

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. 

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. 


--------------------
\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. 


   NAVY MAY HAVE DIFFICULTY
   FINANCING ITS SHIPBUILDING
   PROGRAM
---------------------------------------------------------- Chapter 3:3

The cost of new surface combatants is a large share 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. 

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. 



                                    Table 3.3
                     
                        Recent Annual Funding for Surface
                       Combatants, Other Ships, and Overall
                                 Navy Procurement

                         (Then-year dollars in billions)

                                                    Fiscal year
                                    --------------------------------------------
                                                      1997
                                                    (Curre
                                      1995    1996      nt       1998       1999
                                    (Actua  (Actua  estima  (Requeste  (Requeste
Procurement                             l)      l)    ted)         d)         d)
----------------------------------  ------  ------  ------  ---------  ---------
Arleigh Burke-class destroyer         $2.6    $2.2    $3.5       $2.8       $2.7
 (construction and advance
 procurement)\a
Other ship construction and            3.8     4.3     2.0        4.6        3.3
 conversion
================================================================================
Total Navy shipbuilding and           $6.5    $6.6    $5.5       $7.4       $6.0
 conversion\b
================================================================================
Total Navy procurement\c             $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 DRIVER
      OF SURFACE COMBATANT COST
-------------------------------------------------------- Chapter 3:3.1

The average ship cost is determined by a number of factors, including
business strategy, contractor competition and productivity,
procurement 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. 

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. 

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

   (See figure in printed
   edition.)

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 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 FUNDING
      WILL NEED TO COMPETE WITH
      OTHER DEFENSE PRIORITIES
-------------------------------------------------------- Chapter 3:3.2

Attempts to achieve a balanced budget and manage competing priorities
both within the Navy and among the other services will make funding
surface combatant construction to sustain planned force levels
difficult.  After fiscal year 2000, the Navy plans to increase its
spending on numerous 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. 



                                    Table 3.4
                     
                      Examples of Competing Navy Procurement
                        Programs and Their Estimated Costs

                         (Then-year dollars in billions)

                                                                   Fiscal years
                                                                  of procurement
                                                                  --------------
                                                     Funding for
                                                fiscal year 1998
                                                             and
                                                      balance to
Navy program                                            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                      38.7\a    1998    2018
LPD-17 class amphibious transport dock ship                  9.6    1999    2004
CVN-77 nuclear aircraft carrier                              5.4    2002      \b
First three Nimitz-class aircraft carrier                    6.8    1998   2005\
 nuclear refueling overhauls\c
--------------------------------------------------------------------------------
\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

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. 

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. 


--------------------
\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. 

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


SEVERAL FACTORS COULD AFFECT THE
FUTURE SURFACE COMBATANT FORCE
============================================================ Chapter 4

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. 


   NEAR-TERM DECISIONS COULD
   AFFECT THE FORCE FOR MANY
   DECADES
---------------------------------------------------------- Chapter 4:1

Force structure decisions for ships have long-term consequences on
the size and overall capability of future forces.  The number of
years between the introduction of a class of ships into the force and
their progressive retirements can span nearly half a century.  This
time span does not include the many years needed for the initial
planning, design, and 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. 

   Figure 4.1:  Projected Force
   Lives of Selected Surface
   Combatant Classes

   (See figure in printed
   edition.)

   Source:  Our analysis of Navy
   data.

   (See figure in printed
   edition.)

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 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. 


--------------------
\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. 


   REVIEW MAY CHANGE DOD PLANNING
   PARAMETERS FOR MEETING NATIONAL
   SECURITY OBJECTIVES
---------------------------------------------------------- Chapter 4:2

In its May 1995 report,\3 the Commission on Roles and Missions of the
Armed Forces recommended that the Secretary of Defense conduct a
quadrennial review of the defense program at the beginning of each
newly elected presidential administration.  The Commission believed
the review ".  .  .  would provide the foundation for a consistent
military strategy, defense force posture, and budget estimate for use
in the Secretary's [of 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 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). 


--------------------
\3 Directions for Defense (Report of the Commission on Roles and
Missions of the Armed Forces, May 24, 1995). 


   NEW CAPABILITIES COULD AFFECT
   SURFACE COMBATANT ROLES AND
   MISSIONS
---------------------------------------------------------- Chapter 4:3

Several significant improved or new capabilities could affect the
requirement for surface combatants.  Even though these improvements
and capabilities could add new responsibilities for the force, they
could provide greater efficiencies in the use of the force and allow
changes in doctrine and operational concepts that could reduce force
requirements.  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. 


      PLANNED IMPROVEMENTS FOR
      TOMAHAWK WILL LIKELY AFFECT
      ITS USE IN WARFARE
-------------------------------------------------------- Chapter 4:3.1

The Navy is making various improvements to the Tomahawk cruise
missile to increase its effectiveness, flexibility, and
responsiveness and strengthen 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. 

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

   (See figure in printed
   edition.)

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

   (See figure in printed
   edition.)

   Source:  Navy.

   (See figure in printed
   edition.)


--------------------
\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. 


      THEATER BALLISTIC MISSILE
      DEFENSE CAPABILITY IS A
      MAJOR NEW MISSION
-------------------------------------------------------- Chapter 4:3.2

Theater ballistic missiles have been used in six regional conflicts
since 1973--the most recent of which was the 1994 conflict between
North and 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 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. 


--------------------
\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. 


      COOPERATIVE ENGAGEMENT
      CAPABILITY COULD INCREASE
      CONNECTIVITY AMONG FORCES
-------------------------------------------------------- Chapter 4:3.3

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


   ARSENAL SHIP COULD
   SIGNIFICANTLY AUGMENT SURFACE
   FORCE CAPABILITIES
---------------------------------------------------------- Chapter 4:4

The Navy and the Defense Advanced Research Projects Agency are
developing a new type of ship--the Arsenal Ship--that has the
potential to provide substantial fire support to a variety of
missions in regional conflicts without the logistics burden of
transporting both delivery systems and ammunition to the shore and
forward areas.  The Arsenal Ship 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. 

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

   (See figure in printed
   edition.)

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


--------------------
\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. 


   OPPORTUNITIES MAY EXIST TO
   IMPROVE FORCE EFFICIENCIES
---------------------------------------------------------- Chapter 4:5

Several operational factors, such as distance and transit speeds to
reach areas of deployment, deployment schemes and group
configurations, and personnel and maintenance policies affect how the
force is employed.  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, 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. 


CONCLUSIONS AND RECOMMENDATIONS
============================================================ Chapter 5

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. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 5:1

Since the end of the Cold War, the Navy's surface combatant force has
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 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 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. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 5:2

We recommend that the Secretary of Defense provide Congress with
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. 

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. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 5:3

DOD concurred with the information in this report and the
recommendation.  DOD stated that the programmed surface combatant
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. 



SELECTED CARRIER BATTLE GROUP
DEPLOYMENTS
=========================================================== Appendix I

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   Number and type of         Unified commands and
dates of deployment        surface combatants         operational areas\a
-------------------------  -------------------------  --------------------------
U.S.S. George Washington   2 Ticonderoga-class        European Command--
(CVN-73),                  cruisers, 1 Arleigh        Mediterranean Sea,
May to November 1994       Burke-class destroyer, 2   Adriatic Sea, and Black
                           Spruance-class             Sea
                           destroyers, and 1 Oliver   Central Command--Arabian
                           Hazard Perry-class         Gulf
                           frigate

U.S.S. Dwight D.           2 Ticonderoga-class        European Command--
Eisenhower (CVN-69),       cruisers, 1 Kidd-class     Mediterranean Sea,
October 1994 to April      destroyer, 1 Spruance-     Adriatic Sea, and Aegean
1995                       class destroyer, and 2     Sea
                           Oliver Hazard Perry-       Central Command--Arabian
                           class frigates             Gulf and Red Sea

U.S.S. Theodore Roosevelt  2 Ticonderoga-class        European Command--
(CVN-71),                  cruisers,                  Mediterranean Sea,
March to September 1995    1 Virginia-class nuclear   Adriatic Sea, and Black
                           cruiser, 1 Arleigh Burke-  Sea
                           class destroyer, and 2     Central Command--Arabian
                           Oliver                     Gulf and Red Sea
                           Hazard Perry-class
                           frigates

U.S.S. America (CV-66),    2 Ticonderoga-class        European Command--
August 1995 to February    cruisers,                  Mediterranean Sea and
1996                       1 California-class         Adriatic Sea
                           nuclear cruiser,           Central Command--Arabian
                           1 Kidd-class destroyer,    Gulf and Red Sea
                           and 2 Oliver
                           Hazard Perry-class
                           frigates
--------------------------------------------------------------------------------
\a This listing shows only some of the geographic areas visited by
surface combatants from the respective carrier battle group. 



                                    Table I.2
                     
                        Pacific Fleet Carrier Battle Group
                                   Deployments

Carrier battle group and   Number and type of         Unified commands and
dates of deployment        surface combatants         operational areas\a
-------------------------  -------------------------  --------------------------
U.S.S. Kitty Hawk (CV-     2 Ticonderoga-class        Pacific Command--Korean
63),                       cruisers,                  coastal waters and
June to December 1994      1 California-class         Japanese coastal waters
                           nuclear cruiser, and
                           1 Oliver Hazard Perry-
                           class frigate

U.S.S. Constellation (CV-  2 Ticonderoga-class        Pacific Command--Korean
64),                       cruisers and               coastal waters
November 1994 to May 1995  1 Spruance-class           Central Command--Arabian
                           destroyer                  Gulf and Red Sea

U.S.S. Abraham Lincoln     1 Ticonderoga-class        Pacific Command--Japanese
(CVN-72),                  cruiser,                   coastal waters and
April to October 1995      1 Arleigh Burke-class      Hawaiian coastal waters
                           destroyer, and             Central Command--Arabian
                           1 Spruance-class           Gulf
                           destroyer
--------------------------------------------------------------------------------
\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 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. 


--------------------
\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. 

\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. 


OPERATIONAL FACTORS THAT AFFECT
HOW SURFACE COMBATANTS ARE
EMPLOYED
========================================================== Appendix II

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. 


   MAJOR OVERHAULS
-------------------------------------------------------- Appendix II:1

Surface combatants and other Navy ships periodically require major
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. 

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

   (See figure in printed
   edition.)

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

   (See figure in printed
   edition.)

   Source:  Navy.

   (See figure in printed
   edition.)


--------------------
\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. 


   PERSONNEL TEMPO
-------------------------------------------------------- Appendix II:2

During peacetime, the availability of surface combatants for
deployments 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. 

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
-------------------------------------------------------- Appendix II:3

Operational tempo (OPTEMPO) defines the fuel budgeted to fund
operations 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. 


   INTERDEPLOYMENT CYCLE
-------------------------------------------------------- Appendix II:4

Ships returning from deployment generally require nearly 1-1/2 years
to prepare for a subsequent deployment.  During this interdeployment
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. 

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. 


   DISTANCE, SPEED, AND PORT
   VISITS
-------------------------------------------------------- Appendix II:5

The round-trip distance a ship must travel between its home port and
a deployment region and the time required for the trip affects ship
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 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. 


   LOGISTICS IN THEATER
-------------------------------------------------------- Appendix II:6

While deployed in a forward area, ships require periodic repairs and
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. 

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

   (See figure in printed
   edition.)

   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.

   (See figure in printed
   edition.)

   Source:  Navy.

   (See figure in printed
   edition.)




(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
========================================================== Appendix II



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix IV:1

Carol R.  Schuster, Associate Director
Richard J.  Herley, Assistant Director
Mark J.  Wielgoszynski, Evaluator-in-Charge
Bob N.  Kenyon, Evaluator
Karen S.  Blum, Communications Analyst


   NORFOLK FIELD OFFICE
-------------------------------------------------------- Appendix IV:2

C.  Douglas Mills, Jr., Regional Assignment Manager
John R.  Beauchamp, Evaluator


*** End of document. ***