By Geoff Fein
In a surprise, Defense Secretary Robert Gates yesterday called for terminating Lockheed Martin‘s [LMT] VH-71 presidential helicopter, including the first batch of aircraft that some believed would have been spared.
Additionally, Gates recommended the Navy build three DDG-1000s at General Dynamics‘ [GD] Bath Iron Works, ensuring a smooth transition to restarting the DDG-51 line.
Gates also recommended the Navy buy an additional 31 of Boeing‘s [BA] F/A-18E/F Super Hornets in FY ’10, a move many observers predicted.
Some had expected to see Gates call for a dip in the Navy’s aircraft carrier fleet to as few as nine ships. While the fleet won’t drop that low, Gates did call for adjusting the procurement rate to make it more affordable.
“We will shift the Navy Aircraft Carrier program to a five-year build cycle placing it on a more fiscally sustainable path. This will result in 10 carriers after 2040,” he said at yesterday’s press conference..
Gates also called for the delay in CG(X), the Navy’s next generation cruiser. The service has been unable to wrap up the analysis of alternatives and officials pushed the procurement date several times to the right.
“We will delay the Navy CG(X) next generation cruiser program to revisit both the requirements and acquisition strategy,” Gates said.
Among the issues surrounding CG(X) has been the decision by lawmakers for the Navy to make CG(X) a nuclear powered surface ship.
The most stunning decision, though, might be the recommendation to terminate the presidential helicopter program.
“This program was originally designed to provide 23 helicopters to support the president at a cost of $6.5 billion. Today, the program is estimated to cost over $13 billion, has fallen six years behind schedule, and runs the risk of not delivering the requested capability,” Gates said.
Lockheed Martin and partners AgustaWestland and Bell Helicopter Textron [TXT] beat our rival Sikorsky [UTX] for the contract to build the next Marine One helicopter.
Adding to the cost, schedule and technical issues that challenged the effort, in January, the Navy submitted paperwork notifying Congress that the VH-71 presidential helicopter has a Nunn-McCurdy breach (Defense Daily, Jan. 30).
Since December 2007, System Development and Demonstration (SDD) work on Increment II has been under a Navy issued a stop work order. There was expectation the order would be lifted as of last October. The order, however, was extended to Sept. 30, 2009.
Even with Increment II’s troubles, Lockheed Martin noted it was nearing completion of the first nine helicopters (Increment I), five of which would be eventually delivered to the White House (Defense Daily, Feb. 27).
There had been some discussion of holding off on Increment II and building more of the Increment I aircraft. That was a move Gates decided against.
“Some have suggested that we should adjust the program by buying only the lower capability ‘increment one’ option. I believe this is neither advisable nor affordable,” he said. “Increment One helicopters do not meet requirements and are estimated to have only a five-to-10-year useful life. This compares to the current VH-3 presidential helicopters that are 30 to 40 years old.”
The VH-3 is built by Sikorsky.
Just want this means for Lockheed Martin won’t be determined until Congress gets its chance to review and amend the president’s defense budget.
The company said it is assessing the situation.
“Today, Secretary Gates announced the Department of Defense’s priorities for the future. Several Lockheed Martin programs, including F-22, F-35, VH-71, LCS, and TSAT were discussed. We’re assessing the impact of [Secretary Gates’] decisions on all affected programs. As we move forward with the budget process, Lockheed Martin will continue to support our customers and work to deliver affordable solutions that meet their strategic and operational needs,” Troy Scully, a Lockheed Martin spokesman, said.
Shipbuilding fared better under Gates’ recommendations.
The Littoral Combat Ship (LCS) was left unscathed, and Gates hoped to build all three of the DDG-1000s the Navy has settled on.
“We will include funds to complete the buy of two Navy destroyers in FY ’10. These plans depend on being able to work out contracts to allow the Navy to efficiently build all three DDG-1000 class ships at Bath Iron Works in Maine and to smoothly restart the DDG-51 Aegis Destroyer program at Northrop Grumman’s Ingalls shipyard in Mississippi,” Gates said. Even if these arrangements work out, the DDG-1000 program would end with the third ship and the DDG-51 would continue to be built in both yards.
“If our efforts with industry are unsuccessful, the department will likely build only a single prototype DDG-1000 at Bath and then review our options for restarting production of the DDG-51. If the department is left to pursue this alternative, it would unfortunately reduce our overall procurement of ships and cut workload in both shipyards,” he added.
Last year, the Navy opted to truncate the DDG-1000 effort, dropping from seven down to two of the multi-mission combat ships, and returning to the DDG-51 Arleigh Burke– class. The decision was based on new threat analysis that Navy officials said made the DDG-1000 ineffective. The decision led to intense battles among lawmakers, the Navy and Defense Department officials.
“The DDG agreement is a result of partnering with the Navy to allocate and reallocate the surface combatant workload within the shipbuilding industry. The intent is to allocate construction responsibilities to ensure shipyard workload stability, stabilize and minimize cost risk for the DDG-1000 program, provide for an efficient re-start of the DDG-51 program, facilitate performance improvement opportunities at the shipyards, and maintain the sources of supply for future Navy surface combatant shipbuilding programs,” Northrop Grumman said in a statement. “This is aligned with the Northrop Grumman Shipbuilding strategic objective to reduce cost by allowing us to capture the value of series production, economic order quantities and production engineering.”
Gates also called for adding $200 million to fund conversion of six additional Aegis ships to provide ballistic missile defense capabilities.
Additionally, Gates recommended the Navy begin the replacement program for the Ohio-class ballistic missile submarine in FY ’10.
In a move that is sure to displease the Marine Corps, Gates recommended delaying the 11th LPD-17 class ship along with the Mobile Landing Platform (MLP) to FY ’11, ” in order to assess costs and analyze the amount of these capabilities the nation needs.”
General Dynamics NASSCO shipyard was recently awarded the contract to build the MLP. Northrop Grumman [NOC] Shipbuilding Avondale shipyard in New Orleans is building the LPD-17 class.
Gates did not recommend any changes be made to the Marine Corps’ Expeditionary Fighting Vehicle program, which has been undergoing a redesign after a achieving a critical Nunn- McCurdy breach in 2007 (Defense Daily, June 8, 2007).