Lawmakers from districts with Littoral Combat Ship (LCS) shipyards are increasingly worried about the Navy’s request to procure only one vessel in the FY ’19 budget, but Navy Secretary Richard Spencer said he is looking at ways to shore up the industrial base.
Rep. Bradley Byrne (R-Ala.) told Spencer at a hearing on Tuesday that the service’s “acquisition plan for small surface combatants fails to provide for an enduring industrial base. In fact, it will erode the industrial base for those ships.”
These comments came during a House Armed Services Committee hearing on the FY ’19 budget request and acquisition reform with all three service leaders.
The two LCS variants are built by Fincantieri Marinette Marine in Wisconsin (Freedom-class) and Austal USA (Indepoendence-class) in Mobile, Ala. The Navy’s current plan is to procure one LCS in FY ’19 then transition to the follow-on frigate (FFG(X)) program in FY ’20.
Building too few LCSs is a common complaint by Byrne, whose district includes Austal USA’s LCS shipyard.
Byrne highlighted the industrial base consists of seven shipyards but requesting just one LCS does not help ensure an enduring industrial base at these two yards.
He reiterated that Program Executive Officer (PEO) LCS Rear Adm. John Neagley told the committee last year that three ships per year is the “optimal sustaining rate” for the LCS yards and earlier this month Assistant Secretary of the Navy for Research, Development and Acquisition (RDA) James Geurts admitted one ship is “not near the optimal rate.” (Defense Daily, March 7).
The two yards are telling him “if we go to one Littoral Combat Ship that they’ll have a dramatic erosion of the industrial base. They will lay off thousands of shipyard workers and we look at the prospect of losing one or both of those two shipyards. Shrinking the number of shipyards from seven to five. That’s the industrial base,” Byrne said.
Byrne said part of the problem is the Navy was originally supposed to have finished transitioning to the FFG(X) in FY ’19 and these scheduling issues result from a lack of urgency.
“Since you’ve come on board I haven’t seen the Navy pick up the urgency on this program,” he said. “In fact, I see the opposite. I think you’re slowing down.”
Spencer strenuously disagreed on urgency. While inviting Byrne to lunch to discuss this, he pushed back that bringing the frigate from initial discussion in 2018 to contract award in late 2019 and getting the ship out the door three years later shows urgency.
Photo: U.S. Navy
“I’d like to see comparison to any other platform we’ve done on that timeline and that is what is happening under my tutelage, just so you know,” he said.
Spencer agreed the Navy has to provide steady work to the industrial base and that he can only use what is funded directly through the budget request.
He said the service is having success in budget reformation and can allocate money to other platforms. This includes up to $650 million extracted from de-obligation discipline that can be used in another platform, like LCS.
De-obligation discipline refers to procedures when DoD moves funding originally obligated to one program and can use it for another. Spencer said the Navy has been able to find and move up to $650 million previously obligated to other programs.
“That’s the portfolio management we’re struggling with. I totally understand where you’re coming from, I’m working within the confines that I have,” he said.
Byrne also pressed that given the LCS producers, the Navy could focus on them rather than the new LCS competition.
“You’ve got programs at Wisconsin and Alabama that will produce your frigate for you right now. You don’t need to go to other companies,” he said.
Similarly, Rep. Mike Gallagher (R-Wis.), whose district includes Marinette, Wis., asked if the LCS procurement rate is an acceptable outcome for the health of the industrial base.
Spencer acknowledged he has to find the resources necessary to balance the health of the industrial base, that one more LCS is not ideal, and there are options to help the base.
“Does one work, no one is definitely not optimal. Can we sit here and within our bounds and try to move foreign military sales to the left? That’s a lever. Do we have the ability to actually find resources to fund a different platform internally within our budget? That’s a lever. Those are the thing that we’ll be looking at.”
Last May the White House added a second LCS to the FY ’18 budget request following congressional complaints. Although the administration originally defended that request, it quickly changed its position to being “supportive” of a second LCS (Defense Daily, May 24).
The following month the White House released a set of FY ’18 budget amendments adding a second LCS paid for by canceling or reducing other unnecessary program funds (Defense Daily, June 30, 2017). Congress eventually passed appropriations including the second LCS.