Littoral Combat Ship Costs, Issues Rising Again
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Back on July 24/07, in a statement to Congress, the Congressional Budget Office had this to say [PDF] about the Littoral Combat Ship program:
“The first FFG-7, including its combat systems, cost a total of about $650 million (in 2008 dollars) to build, or about $235 million per thousand tons. Applying that per-ton estimate to the LCS program suggests that the lead ships would cost about $575 million apiece, including the cost of one mission module (to make them comparable to the FFG-7)… Navy has not publicly released an estimate for the LCS program that incorporates the most recent cost growth… CBO estimates that with that growth included, the first two LCSs would cost about $630 million each, excluding mission modules but including outfitting, postdelivery, and various nonrecurring costs… Excluding mission modules, the 55 LCSs in the Navy’s plan would cost an average of $450 million each, CBO estimates.”
“Cost Growth Leads to Stop-Work on Team Lockheed LCS-3 Construction (updated)” and “US Navy Sinks LCS-4 Construction” chronicled the crash of the original program’s acquisition plan, and cancellation of both Flight 0 ships. Both contractor teams refused to commit to a new contract model that would let the Navy continue to force as many design changes as they liked, while holding contractor fees fixed and leaving the contractor financially responsible for cost overruns. Now Defense News reports that Navy FY 2009 budget documents released on Feb 4/08 give cost figures for the first 2 LCS ships: Team Lockheed’s LCS 1 Freedom, and the Austal/GD team’s trimaran LCS 2 Independence. Care to guess?
LCS 1, USS Freedom:
$531 million “total end cost”
$ 75 million final outfitting & post-delivery changes
$ 25 million final system design
——
$631 million
“Total end cost” is the figure generally used for cost-baselining a ship. It compares to the original projections of $220 million for the LCS class. In LCS 1’s case, the figure includes $15M in change orders, $12M in government-furnished equipment (GFE) that’s bought separately and then integrated, and $33M “other.”
LCS 2, USS Independence
$507 million “total end cost”
$ 75 million final outfitting & post-delivery changes
$ 54 million final system design
——
$636 million
In LCS 1’s case, the “total end cost” includes $20M in change orders, $7M in government-furnished equipment (GFE) that’s bought separately and then integrated, and $40M for “other.”
Those Congressional Budget Office estimates are looking very sharp. At the same time, questions remain re: the LCS’ lack of flexibility in its weapons, and inability to perform key roles like fleet air defense or anti-ship combat. In October 2007, the US GAO audit office’s Mine Warfare module integration study raised more warning flags:
“The Navy has refined its concepts of operation for the Littoral Combat Ship, increasing awareness of operational needs. However, the Navy has not yet reconciled these concepts with the ship’s physical constraints, and the trade-offs involved ultimately will determine the ship’s capabilities. For example, operation of mine countermeasures systems is currently expected to exceed the personnel allowances of the ship, which could affect the ship’s ability to execute this mission. In addition, the Littoral Combat Ship will have only limited capability to conduct corrective maintenance aboard. However, because the Navy recently reduced the numbers of certain mission systems from two to one per ship, operational availability for these systems may decrease below current projections. Moreover, the mine countermeasures mission package currently exceeds its weight limitation, which may require the Navy to accept a reduction in speed and endurance capabilities planned for the Littoral Combat Ship. It is important that the Navy assess these uncertainties and determine whether it can produce the needed mine countermeasures capabilities from the assets it is likely to have and the concepts of operation it can likely execute.”
Additional Readings
- DID FOCUS Article – The USA’s New Littoral Combat Ships (updated). This is a “DII Q.V.” article, which means that even though it’s a FOCUS Article, it’s public access.
- Information Dissemination – Mine Warfare and the Littoral Combat Ship. A well-done, critical look at the GAO report.
