The Congressional Budget Office (CBO) estimates the Navy and Marine Corps’ new Landing Ship Medium (LSM) will cost about $340 to $430 million per ship, well over two times the Navy’s estimate at $150 million per hull.
In a report released April 11, CBO says this range is dependent on the full load displacement of the final ship, since the current offereos have a range of options, particularly cargo space beyond the minimum requirement of 8,000 square feet.
CBO estimates these costs based on a model that uses ship weight, which is not finalized. The report expects the ship will cost about $120 million per thousand tons of weight.
The LSM is planned to be a hybrid between an amphibious warfare ship and a vessel based on commercial standards, which makes it harder for CBO to narrow the cost range.
CBO notes that ships built to military standards have more safety features, stronger hulls and compartments, and more shock-hardened systems, so if LSM was closer to the amphibious warfare ship standards it would cost between $475 million to $600 million each.
However, if the Navy let the LSM be built closer to commercial standards, CBO estimates each hull would cost between $110 million to $140 million each.
The Navy’s position is that LSM will be built to mostly commercial standards, but with the survivability and recoverability features of an amphibious warfare ship.
“Those features include adjustments to a commercial ship design that would strengthen the ship, shock-harden several of its critical areas or systems, provide better firefighting features, and protect the ship’s magazine, among other things. In formulating estimates for the LSM, the Navy uses cost-estimating relationships that borrow from amphibious warfare ships, combat logistics ships, and commercial ships,” CBO says.
The Navy and Marine Corps previously said they intend the LSM to be 200 to 400 feet long, have a draft of 12 feet; transit speed of 14 knots; range of 3,500 nautical miles; crew of 70 sailors; payload capacity of 50 Marines and 648 short tons; cargo space of at least 8,000 square feet; a crane, off-load ramp and helicopter landing pad; and service life of 20 years.
The Navy’s estimates predict an 18-ship LSM program costing about $2.6 billion total in 2024 dollars.
Fiscal year 2025 budget request documents note the Navy plans to procure the first LSM in FY ‘25 at a cost of about $268 million while it plans another ship in FY ‘26 that will cost $200 million, then $349 million combined for two ships in FY ‘27, $305 million for two in FY ‘28, and $311 million for two in FY ‘29 (Defense Daily, March 13).
The Marine Corps ultimately wants 35 LSM-type ships to transport the Marine Littoral Regiment, but the services have settled on at least 18 initially. The remaining ships for the LSM purpose could include a combination of other vessels being used to test the LSM concepts, like the Spearhead-class expeditionary fast transport ship or the leased commercial Stern Landing Vessel.
CBO’s report estimates that a full 35-ship LSM program would have a cost range of $11.9 billion to $15 billion, depending on the final size of the ship. It also says the first LSM will cost $460 million to $560 million.
Notably, while CBO’s analysis maintains the same cost per ship with the larger fleet size, it says “in a larger program, the cost-saving effects of learning would be almost equally offset by the real (inflation-adjusted) cost growth in the shipbuilding industry that would occur over the longer period it would take to purchase the additional ships.”
The report also says CBO’s estimates are higher now than in a previous analysis of the Navy’s 2024 shipbuilding plan “ because CBO received updated information about the preliminary LSM designs, which indicated that lightship displacements are now larger than they were when CBO developed its estimates for its analysis of the shipbuilding plan.”
CBO says while the Navy has not indicated planned ship displacement, it was provided information that indicated designs under consideration will have displacement ranges of 4,500 tons to 5,400 tons when fully loaded or 2,900 tons to 3,600 tons without crew, stores, cargo, fuel, and other items.
In 2021 the Navy partnered with Austal USA, Bollinger Shipbuilding, Fincantieri Marinette Marine, VT Halter Marine (now owned by Bollinger and renamed Bollinger Mississippi), and ship design firm TAI Engineers to develop LSM concepts and create the preliminary design.