By Geoff Fein
Lockheed Martin [LMT] yesterday submitted its bid to build the next series of Littoral Combat Ships (LCS) for the Navy, a company spokeswoman said.
In March, the Navy issued its LCS request for proposal (RFP) to Lockheed Martin and General Dynamics [GD]. Industry responses were due today.
A spokesman for General Dynamics declined to comment on whether the company had also submitted its bid a day early.
Lockheed Martin could not discuss specifics of its submission because of the competition.
“We’ve delivered a proposal we believe is good for the Navy,” the spokeswoman told Defense Daily yesterday.
Both teams’ bids are to build one LCS in FY ’08 and two in FY ’09.
For weeks, rumors have swirled regarding whether either Lockheed Martin or General Dynamics would submit a bid to build the next three ships. Of concern was the congressional cost cap placed on the ships and the decision to make the new contracts fixed price incentive-fee for all three ships.
The current cost cap is $460 million per ship. The Navy has sought to get an increase to the cap for inflation, but that has not yet been approved by lawmakers.
The FY ’06 National Defense Authorization Act, placed a $220 million cost cap on the fifth and sixth LCS for each seaframe. But because of significant cost increases to LCS, the Navy went back to Congress in May 2007 seeking approval for raising the cost cap to $460 million.
In its mark up of the White House’s proposed FY ’08 defense budget, the House Armed Services seapower and expeditionary forces subcommittee sought to increase the cost cap by up to $10 million per ship (Defense Daily, May 9).
The Navy had been looking to move the LCS contracts from cost-plus to fixed price incentive-fee as a way to contain construction costs. In 2007, after acknowledging cost increases to Lockheed Martin’s ship, the Navy attempted to negotiate a new contract for LCS-3 (Lockheed Martin’s second ship).
The two parties failed to reach an agreement and in April 2007 and the Navy canceled LCS-3 (Defense Daily, April 13, 2007).
In November, a similar effort to get General Dynamics to negotiate a new contract and a similar outcome led the Navy to cancel LCS-4, the shipbuilder’s second LCS (Defense Daily, Nov. 2).
While the RFP was not publicly available, there were some changes in the latest competition. One change was extending the build cycle to 32 months from start of construction to delivery. The first two ships, the USS Freedom (LCS-1), built by Lockheed Martin, and the USS Independence (LCS-2), built by General Dynamics, were both built under a 24-month time frame (Defense Daily, April 10).
Navy Secretary Donald Winter is scheduled to visit LCS-2 today at Austal USA in Mobile, Ala., according to a Navy spokeswoman.
Contract award for the ships is anticipated to occur in the mid to late August time frame.
Meanwhile, the Defense Acquisition Board has scheduled a Milestone A review of LCS on June 18.
The review is part of the approved acquisition strategy. However, the timing of the review does not mean the FY ’08 and FY ’09 contract awards will occur in June.