TAB B

Purpose:

The purpose of this document is to establish a joint Navy/DARPA agreement as to the objectives, roles and responsibilities, schedule, and funding for the Arsenal Ship demonstration program.

Background:

Arsenal Ship is a high priority program for the Navy to acquire a new capability for delivery of large quantities of ordnance in support of land and littoral engagements. Key to both Arsenal Ship’s affordability and operational flexibility is off-board integration of all but the most rudimentary C4I. The ships are conceived to be theater assets that will operate under the authority of the joint Commanders-In-Chief (CINCs) and will receive their targeting along with command and decision information from other assets. Early in Arsenal Ship’s life this control will be exercised through an Aegis platform, though as other assets mature, control will transition to aircraft such as AWACS or an E-2 with CEC-like capability and eventually to the Marine or Army shooter on the ground. Thus, the Arsenal Ship will not be fitted with long range surveillance or fire control sensors, but will be remotely controlled via robust data links. The data links will be secure, redundant and anti-jam in order to provide high reliability in the connectivity of the Arsenal Ships in high jamming operational scenarios. The program overall is an attempt to leverage the significant current joint investment in Link 16 and CEC. The Arsenal Ship’s survivability will be primarily achieved through passive design techniques. While active systems are not ruled out, they must be consistent with overall cost and manning goals. These design goals will allow the Arsenal Ship to have a very small crew (potentially, none at all) which will be a key ingredient in minimizing its life cycle costs. It is expected that the Arsenal Ship will transit and operate independently but when in a hostile environment, its defense will be enhanced by working cooperatively with other elements of the force. It is envisioned that the Arsenal Ship will be a large hull designed so that the weapons carried onboard are protected from damage and the ship is "virtually unsinkable" if hit by missiles, torpedoes, or mines.

This demonstration program is a non-ACAT program that has been created to evaluate this new capability while minimizing the risks in acquisition of approximately six ships. To ensure that the program remains affordable, a firm cost threshold for the production ships has been established. This program will be conducted using DARPA’s Section 845 Agreements Authority so as to allow industry wide latitude in satisfying the Navy’s requirements within this threshold. Agreements will be structured to allow tradeoffs between cost and performance. Program success will be judged by the extent to which the Arsenal Ship meets operational requirements.

A second purpose for this demonstration program is to accelerate the Navy’s ongoing acquisition reform activities focused on buying improved ships at a lower cost. To this end, the joint program will focus on exploiting DARPA’s culture and experience in prototyping system programs. We anticipate the production Arsenal Ship contracts will serve as a model for future streamlining.

Technical Objectives:

The Arsenal Ship is intended to provide a large quantity of (approximately 500) vertical launch systems (VLS) with the capability to launch a variety of weapons for strike, fire support, and area air defense. The exact number of VLS missiles will be determined during the program by optimizing the survivability, performance, sustainablity and costs. The demonstration program will highlight Arsenal Ship’s capability as a force multiplier to the Marine Corps, Army, and full array of joint forces. In that regard, it is recognized that certain weapons do not yet exist in the inventory that would allow the full capability to be demonstrated for all missions. No new weapons developments or significant enhancements to weapons are to be pursued as part of this program. Instead, demonstrations should be planned and structured such that significant communications, architecture, and data link functions are evaluated. The goal of the program will be to achieve a balanced design that satisfies the thresholds consistent with the ship’s concept of operations (CONOPS).

The demonstration program must show that the production Arsenal Ships are suitable for performing their mission within prescribed cost constraints. To this end, its objectives are to demonstrate:

1. The performance of the mission for 90 days.
2. The architecture, communications, and data link functions to satisfy the Arsenal Ship CONOPS.
3. The capability for remote launch of strike, area air warfare and fire support weapons. It is envisioned that the test program will include:
   1. Salvo launch of up to 3 Tomahawk missiles in 3 minutes
   2. Single SM2 launch using the arsenal ship as a remote magazine for a Cooperative Engagement Capability (CEC) ship
   3. Single Tomahawk launch using the arsenal ship as a remote magazine for air directed and shore based targeting
   4. Single ATACMS launch from a VLS cell in support of a naval surface fire control mission digital call for fire
4. That the proper balance between passive survivability and active self defense will be sufficient for the expected operating scenarios.

The acquisition cost threshold is based on the average Navy SCN end costs for the five follow ships acquired after this demonstration program, expressed in FY98 dollars. The costs of the weapons are not included.

Life Cycle Costs:

Industry will be tasked to perform the life cycle cost analyses to demonstrate the operating and support costs for their Arsenal Ship design over a 20 year life. This will ensure that the tenets of the program including reduced manning and innovative operating concepts remain focused on minimizing life cycle costs.

Schedule:

The goal of the demonstration program is to have the ship in the water and ready to start meaningful testing in the year 2000. The program manager will maintain a detailed schedule toward this end and present the plan for approval by the Steering Committee. The basic acquisition strategy for this program is to maximize industry involvement through a competitive multi-phase approach to encourage the maximum innovation within the limits of the cost thresholds. The Government, through the program office, will coordinate with industry to ensure the availability of information that the industry teams need to make informed trades.

Funding:

The cost of the R&D program for this demonstration Arsenal Ship will not exceed $520 million including the cost of concept development and competition. These funds will be provided jointly by the Navy and DARPA as follows:

	FY96	FY97	FY98	FY99	FY00	FY01	Total
Navy	$4.0	$25.0	$141.0	$90.0	$80.0	$10.0	$350.0
DARPA	$1.0	$15.0	$47.0	$50.0	$36.0	$21.0	$170.0

The Navy will provide its share of the funds to DARPA at the beginning of each fiscal year.

Roles and Responsibilities:

This joint Navy/DARPA demonstration program will be conducted under the auspices of DARPA’s Section 845 Agreements Authority. DARPA will lead the demonstration program and will transition the leadership to the Navy in the later stages of the program, upon mutual agreement of the parties.

The program will be managed by a joint Navy/DARPA program office with the Program Manager reporting to DARPA. A small program office is envisioned. DARPA, Naval Sea Systems Command (NAVSEA), and the Office of Naval Research (ONR) will initially each provide two billets. It is expected that the program office will grow to a maximum of three billets each as the program grows to maturity. Additionally, Director, Surface Warfare (N86) and Marine Corps will designate program office representatives as CONOPS, Requirements, and Fleet Introduction Officer and Naval Surface Fire Testing and Evaluation Engineer, respectively.

The Navy shall develop a concept of operations (CONOPS) for the program that will be reviewed and considered for update as the program develops. The program office will use the CONOPS to guide the trade studies to be conducted by industry.

The Program Manager will develop a program plan including major decision milestones, and the development of a program transition plan. The Steering Committee will approve the initial program plan and thereafter will conduct quarterly reviews to assess progress and provide guidance to the Program Manager.

The Steering Committee will be as follows:

Director, TTO - DARPA Chairman
Deputy Assistant Secretary of the Navy (DASN, Ships)
Assistant Director, TTO for Maritime Programs - DARPA
Director of Surface Warfare - OPNAV (N86)
Director for Expeditionary Warfare - OPNAV (N85)
PEO for Surface Combatants
Office of Naval Research (ONR33)

Assistant Secretary of the Navy (RD&A)
Deputy CNO for Resources (N8)
Director, DARPA
Commander, NAVSEA
Chief of Naval Research

Term of Agreement:

It is expected that this MOA shall remain in effect for the duration of the demonstration program. Early termination of the program due to funding unavailability, lack of legal authority or other reason beyond the control of the parties shall be a basis for termination of this MOA. Any termination shall be preceded by consultation among the parties.