Although Congress threatened big cuts to the Navy's DD(X) destroyer earlier this year, the program emerged from budget talks relatively unscathed last week. In another victory for the sea service, appropriators and authorizers added $440 million for two more Littoral Combat Ships.

Lawmakers finalized conference agreements on two related pieces of Legislation -- the fiscal year 2006 defense appropriations and authorization bills -- that will shape the Pentagon's budget.

House and Senate appropriators agreed to fully fund the DD(X) program, including $716 million in advance procurement and $1.1 billion in research and development. That decision, which ensures the program will continue, caps a year during which DD(X) faced intense scrutiny. But lately things have been looking up for the program.

Congress' decision to support the program was foreshadowed by the Defense Department's declaration, shortly before Thanksgiving, that DOD would approve the start of the next phase of the destroyer's development.

Though House and Senate authorizers formally agreed last week to impose a $2.3 billion cost cap on the fifth ship in the DD(X) class, this is not as harsh as the cost limit House authorizers proposed earlier this year.

Authorizers prohibited the Navy from pursuing a winner-take-all acquisition strategy that would lead to only one yard building the entire class, but this is no surprise given Congress' previous statements on the issue.

House and Senate authorizers added $50 million for advance procurement of the second DD(X) vessel at a second shipyard, but that extra funding was not appropriated.

The Navy will be required to assemble a report on the efficiency of the naval shipbuilding industry, according to a provision in the defense authorization conference agreement. For this study, the Navy secretary will assess the U.S. shipbuilding industry to determine how worldwide shipbuilding best practices for innovation, processes and infrastructure may be adopted to improve efficiency in program design, engineering and production engineering, organization and operating systems, steelwork production and ship construction and outfitting.

In addition, the appropriations conference report directs the Navy to submit a plan to address shipbuilding cost growth. “The conferees are concerned over the unanticipated cost growth on existing Navy shipbuilding contracts, and agree that the plan directed by the House on this subject is to include details on the cost growth for all existing shipbuilding and conversion efforts,” the report states. This plan, which is due to Congress by Feb. 1, 2006, is supposed to make recommendations on the mechanisms to resolve the cost growth, including the option of converting the remaining work to fixed-price contracts.

Senate appropriators in the conference process did not agree to go along with a House proposal to urge the Navy to reconsider spreading the funding for the LHA(R) amphibious assault ship over two years rather than one (a tactic called split funding). But the conferees agreed to consider either split funding or full funding for the ship, whichever is proposed by the administration.

Appropriations conferees also agreed to require the Navy to submit a report on LCS mission modules; the document is supposed to include cost estimates for these modules by fiscal year.

The DD(X) destroyer is not the only shipbuilding program facing cost limits imposed by Congress.

Authorizers imposed caps for the Virginia-class nuclear-powered attack submarine. Their conference agreement establishes cost caps on the subs at the current contract ceilings for several vessels: SSN-779, $2.33 billion; SSN-780, $2.47 billion; SSN-781, $2.55 billion; SSN-782, $2.67 billion; and SSN-783, $2.72 billion.

Significantly, authorizers agreed to require the Navy to begin a program to design and develop a next-generation submarine that would be a successor to the Virginia-class boats. The goal is to develop a sub with capabilities meeting or exceeding those of the Virginia-class, but at a lower cost.

Further, authorizers capped the cost of the fifth and sixth LCS vessels (without mission packages) at $220 million.

Authorizers gave the Navy the nod to pursue advance procurement, detail design and construction of the LHA(R) amphibious assault ship to be funded in FY-06 through FY-08, but they are withholding 30 percent of the FY-06 funding until a detailed operational requirements document has been approved by DOD and the Navy certifies the design for LHA(R) is stable. Authorizers also added $50 million for this program.

Reacting to the Navy's plans to retire the conventionally-powered aircraft carrier John F. Kennedy (CV-67), authorizers directed the service to maintain 12 carriers in active service, authorizing up to $288 million to extend the life of the Kennedy.