The U.S. Navy's moves last week to build only one Littoral Combat Ship (LCS) design and impose a new competitive structure on the program eliminated several glaring weaknesses in the long-troubled acquisition program.
"The Navy did away with its plans to build two very different LCS designs - a steel-hulled monohull from Lockheed Martin, and an aluminum trimaran from General Dynamics - with each shipbuilder using two shipyards.
Instead, the service next year will chose one design as the basis for 51 new ships. The winning team will receive a contract for up to 10 ships, to be built through 2014 in only one of its shipyards. Another open competition will follow in 2012, where a second shipyard - not part of the original winner's team - will build five ships through 2014. That second shipyard need not be part of the current LCS program, officials stressed.
The plan for buying ships from 2015 on will be developed this winter, Sean Stackley, the Navy's top weapon buyer, told reporters at the Pentagon on Sept. 16. The downselect decision, Stackley said, could come as soon as the end of the second fiscal quarter of 2010 - March - or in the third quarter, in the April-to-June timeframe.
The move eliminates the expensive and inefficient plan to build, crew and maintain different LCS designs that - except for the main gun - had different radars, sensors, engines, systems and other equipment.
It also means that the previous prospect of four shipyards, each forced to go through the difficult first-of-class building process, is gone. Shipbuilders have had increased difficulty in recent years efficiently building the first ship of a new design. Those inefficiencies have become a major cost-growth driver; a 2008 Pentagon study, for example, found that of 10 first-of-class ships built over the previous decade, half more than doubled their planned cost - and none came in on budget.
With the new structure, the Navy hopes the prospect of building 10 ships in one yard will yield efficiencies much sooner, with the second shipyard keeping competitive pressure on the first.
Under the new acquisition plan, the Navy is canceling its request to Congress for three LCS ships in 2010. Those ships were subject to a congressional cost cap of $460 million each, and, while not revealing any figures, Stackley said neither shipbuilder was able to meet that mark.
"Based on proposals received this summer, it was not possible to execute the LCS program under the current acquisition strategy," Stackley said. "There was no reasonable basis to conclude" the cost cap could be met, he added.
The decision to build only one design also eliminates a problem likely to plague the LCS fleet over its entire operational life - the fielding of entirely separate combat systems, which would feature unique sensors and software. The GD and Lockheed combat systems have different operational capabilities and limits, would use unique supply processes, and would need sailors trained specifically on LCS systems.
That situation would be in stark contrast with the rest of the Navy, which is moving to greater commonality in nearly all systems, weapons and designs.
The Navy now will purchase the intellectual rights to the LCS combat system, procure it separately from the ship, and provide it as government-furnished equipment to each of the eventual shipbuilders.
The new acquisition strategy already has been approved by the Pentagon, Stackley said, and the service remains committed to a total of 55 LCS ships.
Cost growth has plagued the LCS program from its inception in 2003. The Navy's original $220 million-per-ship goal has long been surpassed, and the most recent service figures peg the cost for LCS 1 at about $640 million, with LCS 2 priced at over $700 million.
The restructuring comes just as Congress is considering the Navy's 2010 shipbuilding request, and makes moot a debate over how many LCS ships to buy.
The LCS program is nowhere near where Navy planners thought it would be when the first two ships were ordered in 2004. Then, the Navy expected to have 13 ships in commission, being built or under contract in 2009, with a pending request for six ships in 2010.
But only four LCS ships have been built or are under contract. The first ship, Lockheed Martin's Freedom (LCS 1), was commissioned last November and is undergoing a series of adjustments and tests. The first ship from General Dynamics, the Independence (LCS 2), is being fitted out at its builder's yard in Mobile, Ala. Each team began work earlier this year on their second ship - Lockheed's Fort Worth (LCS 3) at Marinette Marine in Wisconsin and GD's Coronado (LCS 4) at Austal USA in Mobile.
Although one of those ships will be the last of its class, construction is continuing because, said Adm. Barry McCullough, the Navy's requirements chief, "we need the capacity now, and we will use those ships."
While construction of the third and fourth ships will keep workers at the shipyards employed on the program, the wisdom of proceeding with those hulls was questioned by at least one long-time observer.
"We'll have two orphaned ships," said a veteran naval analyst. " I don't know how long the Navy's going to use those ships with their unique logistics line."
The restructuring also limits, through 2014, construction to no more than four ships per year, the naval analyst said. "So the talk of five, six, seven or even eight per year won't happen."
It is not clear whether either team has an advantage in the downselect. Many in the Navy are enamored of the GD ship's larger flight deck and mission bay areas but worry about the robustness of aluminum construction and the trimaran hull form. Lockheed, in turn, may have an advantage with its COMBATSS-21 combat system, a derivative of the Aegis combat system used on all the Navy's cruisers and destroyers.
But the downselect's timing in the spring or early summer of 2010 - before either completed ship can be truly tested - means there may only be one key decision factor.
"They may come down strictly on price," said one congressional source.
The service also came in for kudos in responding to congressional pressure on the program.
"Congress told them to downselect to one design, to develop a technical data package [to bid out the combat system] and to allow outside shipyard bids," the congressional source said. And although the $460 million cost cap is considered unrealistic by many - including some on the Hill - it may have "forced the Navy to go back and re-think what they're doing." ■
E-mail ccavas@defensenews.com.
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
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