Huge LCS Restructure To Lower Prices

Huge LCS Restructure To Lower Prices

By Colin Clark Thursday, September 17th, 2009 9:20 am
Posted in Naval, Policy

The Navy scrapped one of three Littoral Combat ships for 2010 and completely restructured the program, trying to increase competition between shipyards and thus lower costs.

The new plan, in very simple terms, is this: Pick a contractor and buy 10 ships over the next five years from one of the two builders, and then, in 2012, pick another shipyard to build another five ships of the same design. The Navy canceled the earlier decision to award a contract to both Lockheed Martin and to General Dynamics after concluding that they could only get economies of scale by encouraging competition between shipyards instead of prime contractors. Otherwise, senior Navy officials made clear they feared they would not be able to buy all 55 LCS ships it plans to buy.

LCS is designed to execute mine detection, anti-submarine warfare and combat against small surface craft.


Congressional reaction was a bit grumpy. Sen. Richard Shelby, (R-Ala.) said he was “disappointed” by the restructuring and hoped that the General Dynamics team wins next year. The Austal shipyard in his state, with which GD is teamed, is located in his state.

“Several months ago, the Navy received bids for two versions of the Littoral Combat Ship (LCS). The bids turned out to be unaffordable. In response, the Navy has made a dramatic change of course,” Rep. Todd Akin (R-Mo.), ranking member of the House Armed Services seapower and expeditionary warfare subcommittee, said in a statement. “This is a bold decision, but it is probably the right one. However, I am concerned that the Navy is forgoing an opportunity to put both ships into a robust sea trial and use operational data to inform their decision.”

In addition to forcing competition between shipyards, the Navy plans to force the combat systems on the ships to become standard systems that can be used on a range of Navy ships, not just LCS. They plan to do this by making them government furnished equipment to which the government owns the data rights.

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pennst98 September 17th, 2009 at 11:04 am

It’s about time they went this way. Considering these are generally cost plus contracts the government has been paying for the same services twice. Twice the facilities and overhead and twice the “plus” (profit)to get the same ship.

I wonder if they could work out a work share restructure, where they produce at both yards but award the loser a subcontract to build the other’s design. That would have the benefit of maintaining capacity/jobs, unfortunately I don’t see that saving enough money to be approved.

TB September 17th, 2009 at 11:41 am

Congressional reaction was a bit grumpy. Sen. Richard Shelby, (R-Ala.) said he was “disappointed” by the restructuring and hoped that the General Dynamics team wins next year. The Austal shipyard in his state, with which GD is teamed, is located in his state.

AKA: Congressman was disappointed his bribery scheme might not pay off. Glad that someone from the other side of the country is a little higher up the food chain on this.

roland September 18th, 2009 at 5:45 am

Nowadays most ships from our conterparts (Russia, Chinese and others) have ships and boats with missiles on it. Does this ships have missiles, Patriot, ICBMs, land to surface missiels on it?

JWN September 18th, 2009 at 4:13 pm

“Does this ships have missiles, Patriot, ICBMs, land to surface missiels on it?”

Not that I’ve heard — a 57mm autocannon, and *maybe* some Stingers and an ASW helo, but nothing else notable.

I liked the cat-hulled design, and it would have made a great littoral ship, but it looked a bit light in the dishing out department.

Heck, I’d even take a modernized German Bremerhaven class boat over what they’re trying to float. Over designed, under gunned.…

Byron Skinner September 19th, 2009 at 2:44 pm

Good Morning Folks,

The LCS (Little Crappy Ships to some in the Navy) in reality are the successor to the Perry Class Firgate. They will be lethal make no doubt about that.

Their utility in the current fight against Pyracy is marginal but the LCS will give good service in the multiple mission roles they will be assigned to the “Green” and “Blue” water operations.

The problem here is that the Navy asked for a $200 million ship and industry has delivered a $450 million ship. Sec. Gates has been clear on several occasions that the price has to come down.

This is not an idle threat on Sec. Gates part, ships with similar or better specification can be bought from foreign shipbuilders at or close to the USN’s $200 million price point.

The problem here is not the production cost of American shipyards, the Gulf shipyards are currently making high quality ships in the 3K ton classes and smaller for other countries at prices that at and even below the prices the USN wants.

The clear implication here is that American ship yards are price gouging the United States Government and are providing inferior products.

Adm. Thadd Allen of the USCG saw this problem a few years ago, scrapped the half hearted unseaworthy efforts of of the in place procurement system, canceled all current and future CG ship contracts and did a most radical thing, made ship design and specification a in house activity of the USCG. This radical old approach is coming close to producing positive results and cost savings. I hope the USN is taking notes.

ALLONS,
Byron Skinner

Steve Dixon October 30th, 2009 at 7:52 am

I’ve tried to read as much as I can about these LCS’s but I’ll be blowed if I can see them as anything other than OVER-SIZED, OVER-COMPLICATED, OVER-PRICED Patrol Boats. 57mm gun = weak JOKE (just for a start).
Have a look at the French (god save us) Gowind series of ships .…. smaller, more versatile, cheaper, better armed.
The only big plus the LCS’s seem to have is speed.
I don’t understand their role — a 57mm gun (no matter how advanced/good it is) is all-but useless for NGS and they don’t appear to have ANY offensive armament worth mentioning.
US$450Million Grey Elephants??? REALLY expensive Mine Sweepers (earplugs anyone?)???
I’m quite willing to change my mind IF someone can just “Please Explain”.

Steve Dixon October 31st, 2009 at 8:55 am

Seriously. Can someone explain the actual role of these things to an ignorant ex-sailor?

Jack Mehoff October 31st, 2009 at 12:02 pm

Scrap the over priced “little crappy ships” and buy Visby Class Corvettes.

I cannot believe the sheer stupidity of “mission modules”. In this day and age, you fight with what you’ve brought with you. You won’t have the luxury of running back to port to get the right mission module.

Joseph T. Whitley November 24th, 2009 at 4:07 am

As for my knowledge the Navy reintroduced the importance of Naval Hospital Ships The USNS Mercy, which was an artist’s concept during the Reagan/Lehman Administration of the 1980’s to perpetuate the prevention of conventional war factions and prevention thereof. The Mercy, The Sanctuary both sister ships and the unmarked the USNS Sanctuary that was used for the Sealift Command was/is there to assist neigboring nations to take preventive measures of war. So where do we go from here?

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