U.S. Navy / Bath Iron Works
Zumwalt-Class Destroyer Cost Overruns
Estimated impact: $22.5B for 3 ships; mission capability gap
Originally planned as 32 ships at $1.3B each, the Zumwalt-class stealth destroyer program was cut to just 3 ships at $7.8B each. The Advanced Gun System's ammunition costs $800,000 per round, making the gun effectively unusable. The ship cannot fulfill its original shore bombardment mission.
Decision context
Whether to continue a program whose unit costs escalated 6x due to quantity reductions, and whether to field a gun system whose ammunition is too expensive to use.
Decision anatomy
Red = risk factor present · Green = protective factor present
Biases present in the decision
★ Primary driver · Severity estimated from bias type and decision outcome
Toxic combinations
Reference class base rates
Across all 143 curated case studies in our library:
Lessons learned
- Sunk cost fallacy in defense: once billions are invested, cancellation becomes politically harder than continuation at any cost
- Planning fallacy in defense acquisition systematically underestimates costs by assuming economies of scale that evaporate when quantities are cut
- Anchoring to the original 32-ship plan made each quantity reduction feel temporary rather than fundamental
Source: GAO Report GAO-16-613, "DDG-1000 Destroyer Program" (2016) (Post Mortem)
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Workflows that fire on decisions like U.S. Navy / Bath Iron Works’s
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