What happened? In a nutshell, the Navy has been flat out lying to itself (for a time, anyway), to Congress, and to the American people about its next generation surface combatant (emphasis on the surface part of that, as you'll see.) According to several sources and statements from senior Navy leadership, the DDG-1000 was supposed to have an improved anti cruise missile capability over the current DDG-51 Burke class destroyers. Unfortunately, it now appears that the DDG-1000 lacks the capability to employ the Standard family of missiles (SM-2, SM-3, and SM-6). That would make it pretty impossible for the DDG-1000 to have any area anti cruise missile. Lie number one.
The second lie comes from the statement which revealed the first lie. In it, a Vice Admiral states that the DDG-1000 is still "meeting the requirements for which it was designed." A previous statement on record by a former CNO says that, as stated above, the DDG-1000 is supposed to have a better area anti-cruise missile capability than the DDG-51. If it can't employ the SM- family of missiles, then these two statements cannot both be true.
In fact, if it can't employ the SM- family of missiles than it is not a DDG- at all and is instead a DD-. A big "stealthy" DD- employing a big gun to give fire support to forces ashore from the littorals. Unfortunately, the Navy already has excess capability in this area from aviation and Marine artillery. Oops.
That's it in a nutshell, but you really should read the whole thing over at Galrahn's place to get a feel for the enormity of this debacle. For me, this takes the cake as far as procurement scandals go because of the blatant deception involved. This would be as if the F-22 lacked the capability to supercruise and employ AMRAAMs and then the USAF lied to cover the fact and tried to buy more anyway. Keep in mind that it seems unlikely that any of this would have come to light any time soon if the Navy hadn't already decided to kill the DDG-1000 program at two ships.
In any case, there's a lot more to come from this. Stay tuned over at Galrahn's place and the rest of the Navy blogosphere.