Cost Growth Leads to Stop-Work on Team Lockheed LCS-3 Construction (updated)

LCS 1, final construction(click to view full) In its November 2006 briefing “Modularity, the Littoral Combat Ship and the Future of The United States Navy” [PDF format]. Washington think-tank The Lexington Institute offered an in-depth look at the LCS as the Navy’s most transformational program, and the key challenges that must be overcome in order to make the LCS program successful. One challenge was cost-growth, and it has now come firmly home to roost for Team Lockheed. DID reported the January 12, 2007 stop-work order on LCS 3, and we will continue to update this article as new developments arise. In the latest development, the Navy and Lockheed could not come to agreement – and so the contract for LCS 3 has been terminated part-way through construction. The General Dynamics/Austal team will continue with construction of LCS 2 & 4, but a warning has been issued in that direction as well… A January 14, 2007 Navy release says the contract for LCS-3 was awarded June 26, 2006, for $197.6 million, and the ship is being constructed at Bollinger Shipyard in Lockport, LA. Current cost projections for the LCS-1 are over $300 million. The US Navy says they are “working closely […]