Warships and Cost Constraints

Abstract

This paper discusses the need and processes for designing warships to meet cost constraints and for managing warship acquisition programs during the design phase to assure effective adherence to production cost constraints by the design team. The resource control methodology used during the contract design of the Arleigh Burke class destroyer, DDG‐51, is examined as a potential model for controlling the cost while maintaining the combat effectiveness of warships. The paper begins with a summary of the basic issue — the relationship among unit cost, unit capability, force level numbers, and force capability — showing recent trends in destroyer costs and force levels. This introduction also includes a discussion of the cost constraint for the DDG‐51 in relation to historical trends and ship construction funding allocation. The resource control methodology used to reduce and control costs of the DDG‐51 is discussed with a summary of the approach, key concepts and tools, chronology of key events, examples, and results achieved. A number of observations on this methodology are then made which are followed by comments on life cycle costs. The paper concludes with remarks on the future application of the resource control methodology and areas for further work to improve future resource control efforts.