Zumwalt, the Littoral Combat Ship and the Lessons of Procurement Failure

Here is a sentence you rarely hear in a shipyard: "We designed a very expensive gun, and then we discovered we could not afford the bullets." It describes one of the most remarkable episodes in the history of American naval procurement. The Navy built a warship around a cannon, bought three of the ships, and then stopped buying shells for the cannon.

That is not a joke, though it deserves one. It is a documented decision with a paper trail, and it is one half of a lesson about how a government that spends enormous sums can still buy too little. The other half is a smaller, faster ship that was supposed to be cheap, flexible and numerous, and that ended up retired early. Between them, the Zumwalt destroyer and the Littoral Combat Ship teach what goes wrong when requirements keep growing, designs are not finished before building begins, and no one is made to answer for the result. Conservatives who care about both a strong Navy and a careful use of taxpayer money should study them.

The Zumwalt: a destroyer for the twenty-first century

In the 1990s the Navy began planning a new class of destroyers to follow the Arleigh Burke class, which had been in production since the late 1980s. The new ship was meant to be stealthy, highly automated, and equipped to support troops ashore with long-range gunfire. The program went by several names before it became the DDG-1000 and the Zumwalt class, named for Admiral Elmo Zumwalt Jr.

The plan, at its peak, called for 32 ships. The design was radical, and every radical element carried risk.

• A hull shaped to be stealthy. The ship's sides slope inward, a "tumblehome" form that reduces its radar signature but departs from the design practice of generations.
• A smaller crew through automation. The ship was meant to operate with a fraction of the sailors of earlier destroyers, which meant that much of the work had to be done by machines that were themselves new.
• An all-electric power system. The ship's propulsion and weapons drew on an integrated power system that was a significant technical bet.
• The Advanced Gun System. Two 155-millimeter guns, firing a rocket-assisted guided shell called the Long Range Land Attack Projectile, designed to hit targets far inland.

Notice what is on the list: new hull, new power, new crew concept and new gun, all in one ship. Defense planners have a name for that, which is concurrency and technology risk, and it is the oldest warning in the procurement textbook. Every one of those elements needed to work, and none had been proven before the Navy committed to building the ship.

How 32 became three

The numbers changed in steps. As the cost estimates rose and the Navy's budget came under pressure, the planned buy shrank, first from 32 ships to a smaller number, then to seven, and in 2008 to two. In 2009, Defense Secretary Robert Gates's budget settled on three. Those three were USS Zumwalt, USS Michael Monsoor and USS Lyndon B. Johnson. The lead ship was commissioned in October 2016.

This is where the arithmetic bites, and it is worth explaining carefully. A ship's research and development cost does not shrink when you buy fewer hulls. It is a fixed cost, spread over however many ships you build. Build 32 and each ship carries one thirty-second of the development bill. Build three and each carries a third of it. So the cost per ship soared, not because the steel got more expensive, but because the denominator collapsed. This is the death spiral that every large program risks: high cost leads to fewer ships, fewer ships raise the cost of each, and higher cost leads to fewer ships.

A worked example, with invented round numbers and labelled as such. Suppose the development bill is 10 billion dollars and each ship costs 2 billion to build. With 32 ships, development adds 10 divided by 32, about 0.31 billion to each, for a unit cost of 2.31 billion. With three ships, development adds 10 divided by 3, about 3.33 billion to each, for a unit cost of 5.33 billion. Same ship, same steel, and the price more than doubled because of how many were bought.

The program also breached the Nunn-McCurdy statute. Nunn-McCurdy, enacted in 1982 as an amendment to the defense authorization law, requires the Pentagon to notify Congress when a major program's unit cost grows past defined thresholds against its baseline, 15 percent for a significant breach and 25 percent for a critical one on the current baseline. A critical breach requires the Secretary to certify that the program is essential and that its costs have been reasonably estimated, or to end it. The Zumwalt program triggered the statute, a sign, not a surprise, of what the numbers had been saying for years.

The gun that lost its ammunition

Now to the part that sounds like satire. The Advanced Gun System was the ship's reason for being, the way it was going to support Marines and soldiers ashore. Its guided shell, the LRLAP, was designed in tandem with the gun.

When the buy fell to three ships, the number of guns that would ever fire the shell fell with it. The shell was custom-built for the Zumwalt and for nothing else. With so few guns, the production run of the ammunition was so small that the price per round rose to a figure reported at roughly 800,000 dollars. In late 2016, the Navy said it would not buy the shells. The ship's guns, as built, had no ammunition in production, and the Navy had to look for alternatives.

Think about the logic. The gun was a major reason for the ship. The ship was priced for 32 hulls and bought as three. The ammunition was priced for the large fleet and bought for the small one. The gun survives as an expensive piece of hardware that has no ammunition to shoot. The Navy afterward turned toward a different mission for the class and sought to refit the ships to carry new long-range missiles, a sign of how far the ships ended up from their original purpose.

Our point is not that the people involved were fools. It is that a system with no one accountable for the whole chain, from the requirement to the shell, will produce this kind of result with great regularity.

The Littoral Combat Ship: cheap, fast and flexible

Meanwhile a second program, begun in the early 2000s, took a very different route to a similar destination. The Littoral Combat Ship was supposed to be the opposite of the Zumwalt: small, fast, inexpensive, built in numbers, and able to operate close to shore, where the open-ocean fleet is less suited. The Navy planned 55 of them.

Two competing designs were built. One, from a team led by Lockheed Martin, had a conventional steel monohull and was called the Freedom class. The other, from a team led by Austal, was an aluminum trimaran and was called the Independence class. The Navy ended up buying both, which meant two separate hull designs, two training pipelines and two supply chains for what was supposed to be a single class of small ship.

The central idea was the mission module. The ship would be a modular platform, with interchangeable packages for surface warfare, mine countermeasures and anti-submarine warfare. Swap the module and you change the ship's job. That is a good idea if the modules work.

The problems of the LCS

The Littoral Combat Ship ran into trouble on three fronts.

Cost. The original goal was a price in the neighborhood of 220 million dollars per ship. By the time the lead ships were delivered, the cost had grown well beyond that goal, and in 2007 the Navy took the unusual step of canceling construction contracts for the early ships of both designs in a dispute over costs, before restarting the program on new terms.

Requirements. The ship had begun as a lightly armed vessel, and as the program matured, the requirement list grew. Requirements grew as the program matured, which raised weight and cost. This is requirements creep: each addition is defensible, and the sum is a different and more expensive ship.

Mission modules and reliability. The modules, the heart of the concept, were late and did not meet expectations. Independent reviews, including those by the Government Accountability Office and the Pentagon's testing office, raised persistent concerns about the ships' reliability, weight and combat survivability, and in 2016 the Navy abandoned the swappable-module concept in favor of fixed mission sets for each ship. The Freedom class also suffered combining-gear (gearbox) failures, and in 2021 the Navy stopped accepting new Freedom-class ships until the defect was fixed.

The Navy reduced its planned purchase. By the end of 2015 the plan had been cut to 40 small surface combatants in total, with the later ships to be a more heavily armed frigate. The lead ship, USS Freedom, had been commissioned in November 2008 and was decommissioned in 2021, after less than thirteen years of service, in a ship type designed for a service life of decades. Several other early ships were retired early in the following years.

What the two programs have in common

Set the stories side by side and the same errors appear.

One. Requirements kept growing. Each ship began as one thing and became another, with every added requirement defended on its own and priced by no one together.

Two. Design and construction overlapped. The Navy began building before the design and technologies were mature. Concurrency means problems are discovered on the production line, where fixing them is most expensive.

Three. The buy fell and the unit cost rose. Because fixed costs spread across fewer hulls, each cut raised the price of what remained.

Four. A promising concept was committed to before it was proven. The all-electric ship, the automation and the guided shell for the Zumwalt, and the modular mission package for the LCS, were each strong ideas that were bought at scale before they were shown to work.

Five. No one answered for the whole. Program managers rotated, budgets changed, and officials in different offices each owned a piece of the problem. When a program runs more than a decade, the person who made the original promise is gone before the bill arrives.

The best defense of the programs

A fair account has to say what the defenders say, and some of it is true. The Zumwalt pushed the state of the art in stealth, automation and power systems, and some of that technology carries forward into later ships. A first-of-class ship will always show problems that later ships avoid. The Navy also faced a hard problem: a post-Cold War fleet of aging cruisers and destroyers, and a pressure to modernize while buying fewer ships.

As for the Littoral Combat Ship, defenders point to the real need for ships that can operate in shallow water, for the experience gained in running new crew concepts, and for the fact that some LCS deployments produced useful work. They say a program that tried something new should not be judged by the standard of one that tried nothing.

Those points are fair, and they explain why the programs were started. They do not excuse how they were run. Innovation is a reason to run a program carefully, with prototypes, tests and checkpoints, not a reason to skip them. The right comparison is not to a program that did nothing. It is to the Arleigh Burke class, which the Navy built in large numbers through repeated upgrades of a proven design, and which remained in production while its supposed replacement came and went.

What conservatives should demand

Conservatives believe in a strong Navy, and a strong Navy needs ships it can afford to build in quantity. Six Arguments Against a Strong Navy, and Why Each One Sinks makes the case for the fleet. This post makes the case that the fleet must be bought well. The reforms are not mysterious.

• Freeze requirements early. Set the requirement, price it, and require a formal, public review before any addition. Each add-on should come with its cost and a cost offset.
• Prototype before production. Fly before you buy, and sail before you build in numbers. Mature the technology on a test bed, not on the hull of a ship in production.
• Keep a competitive proven design alive. The Arleigh Burke line remained available because the Navy kept it. A fallback is cheap insurance against a radical design that does not work.
• Tie program managers to their programs. Long tenures and clear accountability beat rotation. The person who promises a cost should be there when the invoice comes.
• Use the law Congress already wrote. Nunn-McCurdy and the Weapon Systems Acquisition Reform Act of 2009 give Congress the tools to demand certifications and early looks. They work only if Congress uses them, in public.
• Publish the whole-life cost. Include the ammunition, the spare parts and the crew in the price. A gun without a shell is not a bargain at any price.

The same industrial question sits behind The Shipbuilding Gap with China Is an Industrial Story Before a Navy Story, and the same accountability question sits behind The Pentagon Has Never Passed an Audit, and Conservatives Should Mind. A fleet can only be as strong as the system that buys it, and a system that buys badly makes every future ship cost more.

The case in brief

1. The Zumwalt class was planned at 32 ships, built as three, and its custom gun shell was dropped because the production run was too small to be affordable.
2. The Littoral Combat Ship was planned at 55, suffered cost growth, requirements creep and late mission modules, and its lead ship was retired in 2021 after under thirteen years.
3. Both programs show the same causes: growing requirements, concurrent design and construction, falling buys that raised unit costs, unproven concepts bought at scale, and no one accountable for the whole.
4. The defenders are right that innovation carries risk, and wrong that risk excuses poor management.
5. Conservatives should demand frozen requirements, prototypes before production, a proven fallback design, accountable managers, use of the Nunn-McCurdy law and whole-life cost reporting.

What you can do: look up the Government Accountability Office's annual assessment of major weapon programs, pick any one program and read its cost and schedule history, then ask your representative's office whether the relevant committee has held a public hearing on it.