Word has it that Northrop Grumman, the defense giant contracted to build the Navy’s next generation of destroyer has worked to get the project canceled.
A source in the shipbuilding industry tells us Northrop, in a move to protect profits, pushed hard to get DDG-1000, the Zumwalt-class all-things-to-all-people, guided-missile destroyer gutted before the over-budget (and unstable) platform went further into production.
The company has the contract for DDG-1000, which has not proved to be the dream vessel Navy backers touted it to be. As reported in July and discussed here recently, Navy officials cut the class from seven to two ships, with the fate of a third hanging in the 2009 appropriations balance.
The two Zumwalts currently under construction reportedly are cost-plus contracts. Over budget? No problem! Northrop Grumman gets its money. It seems there had been rumblings the Navy wanted to renegotiate the contract for future ships, placing the vessel on a fixed-price contract — a la the deal that wasn’t that stalled the littoral combat ship program (for now) with Lockheed Martin and General Dynamics. (Navy: We must control costs! Lockheed: Then you need to stop making changes! Impasse.)
Northrop thought it prudent to avoid a similar mess. Hey, kill the Zumwalt (a controversial chief of naval operations (whom no one liked anyway) and push forward with, oh, an additional eight Arleigh Burkes (everyone liked him)! Yeah. The DDG-51 program has been successful (and has lacked the drama we’ve come to expect), and Northrop Grumman reportedly has production down to where it can make money on those babies.
Northrop Grumman has become the defense contractor about town. It was they and partner European defense giant EADS that took top prize in the competition for the Air Force aerial refueling tanker contract. (That deal is on hold for now following a Boeing Corporation protest of the award and an exasperated defense secretary.) Aside from the Arleigh Burke cash cow, the Zumwalt was pushing a cool $29 billion.
So, Congress has forced the issue to get a third Zumwalt budgeted. Northrop Grumman probably has gotten the overall program killed. One question: Is the Navy making any decisions? Could the Navy be stuck back in the 1990s looking for its compass heading? Is it dead in the water (for now) with no clear threat to confront (other than itself)?
Billions on the path to self-discovery.