WASHINGTON – The decision is in, and it's split right down the middle.

US Defense Secretary Chuck Hagel has accepted the Navy's recommendation that the design of the small surface combatant (SSC), a more powerful ship to follow the littoral combat ship, will be based on the existing LCS.

The decision, laid out in a memo Hagel sent Wednesday to the chief of naval operations (CNO), rules out several choices that included new designs or a version of the Huntington Ingalls patrol frigate.

But Hagel — contrary to widespread expectations — did not decide whether the SSC would be based on the Lockheed Martin Freedom class, or Austal USA's Independence-class ship.

Nor, apparently, did the Navy favor either design in its recommendations.

Rather, the Navy's plan is to keep buying modified versions of both LCS variants.

"Our plan today is to compete and procure both versions," Navy acquisition chief Sean Stackley told reporters late Thursday at the Pentagon.

Hagel, in the memo, approved the Navy's plan "to procure a small surface combatant based on an upgraded Flight 0+ LCS."

He also gave the service several directives:

■ Develop an acquisition, design and procurement strategy to support buying the new ship "no later than fiscal 2019, and sooner if possible."

■ Submit the acquisition strategy to the undersecretary for acquisition, technology and logistics (AT&L) for review and approval no later than May 1.

■ Continue to look for opportunities to increase survivability and lethality in the ships. Hagel stressed that "competition for the SSC should be sustained to the maximum extent possible within available resources."

■ Provide AT&L and the Pentagon's office of Cost Assessment and Program Evaluation with a service cost position to support the fiscal 2017 budget request, along with a plan on how to control overall program costs. "Cost control should be a major emphasis of the program," Hagel wrote. "I am particularly interested in ensuring that the Navy addresses operations and support cost projections, and takes actions to reduce them."

■ Provide an assessment by May 1 of the cost and feasibility of back-fitting SSC survivability and lethality enhancements into Flight 0+ LCSs already under contract, and for eight more LCSs to be ordered through 2018. The overall intent, Hagel wrote, is "to improve the lethality and survivability of Flight 0+ ships as much as practical."

Hagel's decision affirms the goal of buying a total of 52 LCS and SSCs. The final number and mix, he wrote, will depend on "future fleet requirements, final procurement and operations and support costs and overall Department of the Navy resources."

The SSC task group that developed the Navy's recommendations did not have specific direction to choose a single SSC design, said a senior Pentagon official. "This is not a down-select," nor is there any direction for one. "That wasn't the goal of the tasking," the official added.

Lockheed Martin and Austal USA each submitted SSC proposals based on more powerful versions of their LCS designs. Both companies have said they are to incorporate improvements and design changes in time to meet the 2019 deadline, and are prepared to incorporate many of the improvements into future and existing LCSs.

The companies submitted several versions of their designs, offering the Navy a range of options, including vertical launch systems (VLS), 76mm guns, and advanced combat systems and sensors.

But the proposed versions of both designs selected by the Navy and shown to reporters late Thursday lack those features. Both designs retain the existing 57mm gun, show a relatively small "upgraded 3-D radar," and lack VLS.

Additions or changes include installation of an unspecified over-the-horizon missile; Hellfire missile launchers; Mark 38 25mm guns; two Mark 50 30mm guns; a torpedo countermeasures system; a multifunction towed array system; installation a SeaRAM launcher on the Lockheed ship (already installed on the Austal design); an upgraded countermeasures decoy system; an upgraded electronic warfare system; armor added to vital spaces; and improved signature management.

"This is the lowest-cost alternative that allows us to make use of the investments already made in LCS," Stackley said. "The current estimate for this additional capability is a cost increase of less than 20 percent -- on the order of $60 million to $75 million additionally.

Now, about $360 million to shipbuilder, GFE about another $25 - $28 mil, then program costs programmed annually.

Neither Hagel nor the Navy cited specific cost figures.

"We believe it's affordable, but we didn't put a cap on this," Greenert told reporters. "But SecDef was clear -- cost and the industrial base has to be a consideration.

"The Navy needs a small surface combatant. We need 52 to do the job, and this ship will meet that need," Greenert declared.

The designs, Stackley noted, retain "a degree of modularity to allow the fleet to determine if a ship should concentrate on ASW (anti-submarine warfare) or SUW (surface warfare)."

Configured for ASW, the ships will operate with a variable depth sonar and helicopter anti-submarine weapons. The SUW mission package includes the 30mm guns, ship-launched Hellfire missiles, and two 11-meter rigid hull inflatable boats. All are features of current LCS mission packages.

Compared with LCS, however, the modified ship would permanently operate the multi-function towed array and be fitted with torpedo defense and countermeasures.

Greenert and Stackley said the new ship would not be required to perform the mine countermeasures (MCM) mission – a task that the LCS will handle.

"There are enough mission packages within the 32," to take care of MCM needs, Greenert said.

The new ships will retain mission bays, but it is not clear if or by how much they will be reduced.

In their presentation, Greenert and Stackley did not use the term "SSC," but rather called the ship a "modified LCS."

So is the new ship an SSC, an LCS, an MLCS?

"We don't have a nomenclature yet," Greenert said.

As might be expected, both shipbuilders issued statements of satisfaction with the decision.

"We are very excited to be involved in this program," Austal USA said in a statement. "Austal feels the Navy will be able to more fully exploit the capabilities of the LCS 2 Independence Variant while providing solutions for the Navy's requirements today and well into the future."

"We look forward to working with the US Navy to determine a timely and cost effective method to incorporate additional mission capability into the proven Freedom-variant LCS design and production line," Lockheed said in its statement. "The LCS platform fills a number of critical mission needs … and can be modified to meet future missions the US Navy defines for it."

The decision to continue with both shipbuilders also pleased their congressional delegations, particularly from Alabama.

"This decision recognizes the superb design work by Austal and Lockheed Martin and rules out several choices that included new designs or existing patrol frigates," Sen. Jeff Sessions, R-Ala., said in a statement. "The task force's findings are consistent with our long-standing assertion that the LCS is a cutting edge and versatile ship,"

"Secretary Hagel's decision confirms what I have known all along: the Littoral Combat Ship represents the future of the naval fleet," said Rep. Bradley Byrne, R-Ala., whose district includes Mobile, home to Austal USA. "My staff and I have worked hard from day one to build broad support for this important military program, and this report is a very positive development."

And while the Navy has until May 1 to develop and provide details of the new ships, an even tighter deadline looms in the form of the 2016 budget, due to be finalized in the next few weeks and sent to Congress in early February.

The Navy's plan is to request three LCSs in 2016, but that was dependent on what Congress did with the 2015 budget. With action on both defense bills nearly complete, it appears the 2015 request will survive, and Congress will approve and fund three LCSs — numbers 21-23 — and provide advanced procurement funding for a fourth.

That hull, however — LCS 24 — will complete the current block buy structure under which both Lockheed Martin and Austal USA have been operating, and the Navy has not announced how the next eight ships, numbers 24 through 32, are to be procured before switching to the SSC with number 33.

"The next ships are fiscal '16 ships, Flight 0+," Stackley said. "That'll be through ship 32. At the same time we'll look to pull some of these modifications forward. Decisions [about specific items] will be made on a case-by-case basis. We have a notional plan right now but we have to get through this system selection before we're ready to say we can accelerate these upgrades before the FY19 ship. And that is due to inform the FY17 budget."

LCS has been a contentious program virtually from the day the Navy awarded the first contracts in 2004, and the SSC is a direct result of the continuing controversy. The Pentagon and Navy leadership acknowledge that the SSC choices will not be universally applauded.

"The Navy's new proposal, like the LCS, will continue to have its critics," Hagel said in a statement. "But considering the context of our broader naval battle force and the current strategic and fiscal environment, I believe it represents our best and most cost effective option. By avoiding a new class of ships and new system design costs, it also represents the most responsible use of our industrial base investment while expanding the commonality of the Navy's fleet." ■

Email: ccavas@defensenews.com.

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