Ships Leaking $37 Billion Reflect Eisenhower’s Warning [View all]

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http://www.bloomberg.com/news/2013-02-21/ships-leaking-37-billion-reflect-eisenhower-s-warning.html


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.