Thu Feb 21, 2013, 09:33 AM
xchrom (108,903 posts)
Ships Leaking $37 Billion Reflect Eisenhower’s Warning
Nicholas Kontodiakos/U.S. Navy via Getty Images
The U.S. Navy's Littoral Combat Ship, the Independence, arrives at Naval Air Station Key West in Key West, Florida. The Pentagon's chief weapons tester has cited flaws with the ship's guns, said its helicopter isn't powerful enough to tow mine-hunting equipment and questioned whether it could survive taking a hit in combat.
Navy Secretary Ray Mabus confronted a tough choice in the competition to develop a small, speedy and adaptable ship to patrol close to shore in politically turbulent waters from the Persian Gulf to the South China Sea.
When opposing bids from teams led by Lockheed Martin Corp. (LMT) and Austal Ltd. (ASB) came in for less than the Pentagon projected, Mabus made a costly and unusual decision: Build both versions of the Littoral Combat Ship -- a conventional steel-hulled vessel and a sharp-angled aluminum alternative that has been compared to a “Star Trek” spaceship.
The 2010 decision guaranteed jobs in shipyards building the two designs and ensured political support from the communities and defense contractors that benefit. It also has added at least $400 million in taxpayer costs to support and maintain dual sets of ships over their lifespan, according to the Navy’s estimate.
As the Pentagon faces $500 billion in spending cuts over a decade that are set to begin March 1, the $37 billion program to design and build Littoral Combat Ships may become a target for reductions that would take business from Lockheed and Austal.
6 replies, 1834 views
Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Ships Leaking $37 Billion Reflect Eisenhower’s Warning (Original post)
Response to xchrom (Original post)
Thu Feb 21, 2013, 11:13 AM
unhappycamper (60,364 posts)
3. That's a rather spiffy looking $704 million dollar target barge.
The 57mm gun does not work all that well when the boat is going full tilt.
The United States Navy launched its first littoral combat ship, Sea Fighter, in 2003. Sea Fighter used a SWATH-type hull and was designated as fast sea frame or FSF-1. The ship was put into service in 2005 and serves as an experimental test bed ship using mission modules. Given that the Oliver Hazard Perry, Osprey, and the Avenger classes are all reaching end of life, the U.S. Navy released a requirement for the LCS class ships. In 2004, Lockheed Martin, General Dynamics and Raytheon submitted designs to the Navy of their proposed littoral combat ships. It was decided to produce two vessels each (Flight 0) of the Lockheed Martin design (LCS-1 and LCS-3) and of the General Dynamics design (LCS-2 and LCS-4). After these are brought into service, and experience has been gathered on the usability and efficiency of the designs, the future design for the class were to be chosen (Flight I). The ultimate decision was to fund both designs as two variants of the class. The Navy currently plans to build 55 of these ships.
On 9 May 2005, Secretary of the Navy Gordon R. England announced that the first LCS would be named USS Freedom. Her keel was laid down on 2 June 2005 at Marinette Marine, Marinette, Wisconsin. The contract to build the ship was managed by Lockheed's Maritime Systems and Sensors (MS2) division, directed by Fred Moosally. On 23 September 2006, LCS-1 was christened and launched at the Marinette Marine shipyard. On 19 January 2006, the keel for the General Dynamics trimaran, USS Independence, was laid at the Austal USA shipyards in Mobile, Alabama. LCS-2 was launched 30 April 2008.
Budget overruns and deployments
The U.S. Navy canceled contracts to build LCS-3 of Lockheed Martin and LCS-4 of General Dynamics and Austal USA in April and November 2007, respectively, citing failure to control cost overruns of both designs. Subsequently, the Navy announced a new bidding process for the next three ships, with the winner building two ships and the loser building one. In the 26 September 2008 U.S. Presidential debate, Senator John McCain used the LCS procuring process as an example of botched contracting procedures that drove up the costs unnecessarily.
In March 2009, Secretary of the Navy Donald C. Winter announced that LCS-3 would be named Fort Worth after Fort Worth, Texas and the fourth ship would be named Coronado after Coronado, California, signalling the restart of LCS program. The LCS-3 Fort Worth contract was renewed in March 2009, and the LCS-4 Coronado was renewed in April 2009. The Navy also announced its revised LCS procurement plan in April 2009 that a total of three ships would be awarded in FY 2010 budget. Senior Navy officials also hinted that the Navy may not down-select to one design for further orders, pointing out complementary features of the two designs.
The Navy pressed forward with its Littoral Combat Ship acquisition process, despite calls from former Navy Secretary John Lehman to adapt a fixed-price contracts. Pressure also mounted in the Congress for the Navy to control the cost of LCS: in June 2009, during a hearing of the House Armed Services Seapower Subcommittee, Subcommittee Chairman Gene Taylor, D-Miss, said that other contractors would jump at the chance to build LCS as the subcommittee added language that would require the Navy to open bidding on the project if either lead contractor walked away from the $460 million fixed price contracts that would be offered. In response, the Naval Sea Systems Command conducted a study on whether a reduction of the top speed requirement from 40 knots to 30 could help keep the ships under the price cap.
The Congress also asked the Navy to study improvement programs on existing ships in place of the LCS program. But in June 2009 Vice Admiral Barry McCullough testified in a Senate Armed Services Committee meeting that the Oliver Hazard Perry class frigates and minesweepers were too worn out to continue in service to cover the gap if the LCS development process suffered further delays. Retired Navy Admiral James Lyons called for a $220 million common design with the USCG National Security Cutter (NSC) program to save costs and meet "limited warfare requirements. A Huntington-Ingalls study found that the NSC would be a better match for the listed mission set, except that it did not have the mission modules that the LCS carried to perform these missions.
In support of the LCS program, Northrop Grumman Aerospace Systems, the contractor of unmanned aerial vehicle UAV that would be carried on Littoral Combat Ships, released a study that showed seven LCS can more efficiently perform anti-piracy patrols in the Western Indian Ocean than a fleet of 20 conventional ships for a quarter of the cost.
To help reduce cost of each ships, Navy Acquisition Chief Sean Stackley and Vice Admiral Barry McCullough in September 2009 indicate that only one of the contractors would be offered a fixed price contract in 2010 for up to ten ships, followed by an offer to build five additional ships of the same design as the first contract to the secondary builder. The Congress agreed with the Navy on this plan.
FY2010 budget documents revealed that the total costs of the two lead ships had risen to $637 million for Freedom and $704 million for Independence.
On 16 January 2010, the Independence was commissioned in Mobile, Alabama.
On 4 March 2010, Austal USA split from Bath Iron Works and announced that it would bid on future LCS contacts by itself. Austal could, for example, win the 2010 contract and Bath could win the following contract in 2012.
On 23 August 2010, the US Navy announced a delay in awarding the contract for 10 ships until sometime near the end of the year. A meeting of the Defense Acquisition Board scheduled for 29 October 2010 has been delayed and the Navy has indicated that no decision on the contract can be made until this meeting is held.
The GAO found that deploying the first two ships will delay the overall program because these two ships were not available for testing and development so changes may have to be made in the second pair of ships during their construction instead of being planned for before construction started. The U.S. Navy responded that "Early deployment brought LCS operational issues to the forefront much sooner than under the original schedule, some of which would not have been learnt until two years on."
In 2013, Work explained that part of the cost overruns were due to the shipbuilders bidding to American Bureau of Shipping commercial standards, but the Navy changing this to Level I survivability standards to give the crew a better chance of survival, even though the ships were not expected to continue operating after being hit. The Navy acknowledged that their failure to communicate clearly that the experimental and developmental nature of the first two ships caused a perception that the overall LCS program was in worse shape.
Building both designs
Instead of declaring a winner out of the two competing designs, the U.S. Navy in November 2010 asked the Congress to allow for the order of ten of each design. US Senator Carl Levin said that the change was made because both bids were under the Congressional price cap. Pentagon press secretary Geoff Morrell said that unlike the possibility of splitting orders for projects like KC-X or the General Electric/Rolls-Royce F136, the Pentagon had already paid the development cost for both designs so there were no further development costs required to build both designs and have them compete for future orders.
The Government Accountability Office identified some problems with the designs other than shipbuilding. These included, in GAO's views, extremely long crew training time, unrealistic maintenance plans, and the lack of comprehensive risk assessment.
On 13 December 2010, both production teams extended their contract offers until 30 December in order to give more time for the Navy to push through the plan. The Navy would be forced to award the contract to only one team if it failed to secure Congressional approval. The Navy budgeted $490 million for each ship while the Congressional Budget Office projected a cost of $591 million for each ship. Navy acquisition chief Sean Stackley testified to a Senate panel that the actual price range was $440 to $460 million.
One day before the contract offers were set to expire, both Lockheed Martin and Austal USA received contracts from the Navy to build additional ten ships of their designs. Two ships of each design would be built on every year between 2011 and 2015. LCS-5 of the Lockheed Martin design had the contractual price of $437 million. Austal USA's contractual price for LCS-6 was $432 million. Department of Navy Undersecretary Sean Stackley noted in a conversation with reporters on 29 December 2010, that the LCS program was now well within the Congressional cost cap of $480 million per ship. The average per-ship target price for Lockheed ships is $362 million, Stackley said, with a goal of $352 million for each Austal USA ships. Government-furnished equipment (GFE), such as weapons, add about $25 million to each ship. Another $20 million is figured in for change orders, and "management reserve" is also included. All told, Stackley said, the average cost to buy an LCS should be between $430 million and $440 million.
In the fiscal year 2011, the unit cost $1.8 billion and the program cost $3.7 billion.
Work has said that the two different designs may each be best suited for a different theater, in that the LCS-1 design would be better suited for the enclosed waters of the Middle East, while the LCS-2 design would be better suited for the open waters of the Pacific Ocean. However, in order to increase commonality between the two designs, the Navy will force both types to use the same electronics for their combat systems.
On 10 February 2012, the Navy named LCS-10, the USS Gabrielle Giffords, in honor of former Congresswoman Gabrielle Giffords.
The contractor-based maintenance scheme for the ships has performed poorly, with the poorly supervised and unaccountable contractors leaving problems for the crews. In addition these contract workers must by law be Americans, which will then need to be flown out to the foreign ports the LCS must return to for supplies and maintenance.
In 2012 a special panel was appointed to investigate "challenges identified" in the program.