By Emelie Rutherford
The head of a naval panel in Congress is weighing legislative language directing the Navy to open its Littoral Combat Ship (LCS) program to increased competition if forthcoming ship proposals cannot stay within congressionally dictated cost limits.
Rep. Gene Taylor (D-Miss.), chairman of the House Armed Services Seapower subcommittee, told Defense Daily yesterday his “intention” is to add a provision to his panel’s version of the defense authorization bill setting a firm cost ceiling for future littoral ships, with consequences if that price cannot be achieved.
Lockheed Martin [LMT] and General Dynamics [GD] each have built one LCS, though General Dynamics’ has not been delivered yet, and both companies are negotiating with the Navy for follow-on contracts.
Taylor said the maximum LCS pricetag he would seek is “still a little fluid,” but could be in the range of a $460 million cost cap previously created for the program.
The bill would say “we offer you this much money for the LCS, and you have a limited window of opportunity to accept or reject that,” Taylor said, describing the legislative language he is considering. “If you choose to either reject it outright or not answer it by the date certain (deadline), up to $60 million of those funds yet-unobligated would be transferred to (naval researchers) and they will research it for the purpose of having a detailed set drawings so we can rebid it.”
Taylor told Navy officials at a congressional hearing last week he remains troubled by cost overruns and delays with the LCS program, and wants the government to prepare the design drawings for the two distinct seaframes so additional shipbuilders can compete to build the vessels.
Rear Adm. William Landay, program executive officer for ships, at the March 10 hearing spoke favorably about both LCS builders and said multiple cost-reduction measures are being pursued.
Landay gave lawmakers a “broad” estimate that it would cost $60 million per seaframe and take up to two years to prepare the LCS design packages for use by other shipbuilders (Defense Daily, March 11).
Thus, Taylor said yesterday he is considering “two separate pieces of language (saying) OK, this…$460 (million) is made available for this (LCS) version, this $460 (million) is made available for that version. If, for whatever reason, they choose not to accept it, just turn it down, by (a) date certain then that money’s made available for a detailed set of drawings and we can put out there and (rebid) it.”
Taylor said he needs to discuss his LCS ideas with House Appropriations Defense subcommittee Chairman John Murtha (D-Pa.), whose support is critical.
Cost overruns with the initial LCSs have been attributed in large part to the Navy’s changing of requirements and standards.
Some critics of Taylor’s call for opening LCS to more competition believe he is trying to help Northrop Grumman‘s [NOC] Ingalls shipyard in his district. In addition, observers note such a move would not necessarily solve cost and schedule problems, which have plagued other Navy shipbuilding efforts at shipyards including Ingalls.
Taylor said under his legislative idea, if the LCS program is rebid, the current shipyards and prime contractors could still compete.
“Or any yard, someone who hadn’t competed, or someone who is in position to start a yard,” he added. “Because (I am advised) whoever gets this is going to have to spent a substantial amount of money buying the machinery and tailoring the yard to build that ship.”
Taylor said he sees the LCS, if costs are controlled, as an integral part of the Navy’s future fleet. The service hopes to buy 55 of the ships.
The Seapower subcommittee may be the first panel to mark up the Navy’s shipbuilding request within the Pentagon’s proposed fiscal year 2010 budget. The Pentagon had been expected to deliver its budget to Congress on April 21, yet Taylor said he heard that date may be pushed back by a week.
The congressman said he hopes the Navy’s shipbuilding request stays at the same level of approximately $14 billion from this fiscal year and is not reduced. He hopes the Navy can buy an increased number of ships with such level funding because of the decreased cost of commodities, subcontractors hungry for work willing to offer good prices, and cost- control strategies such as his LCS idea, he said.