By Emelie Rutherford
The House Armed Services Committee (HASC) agreed to give the Navy relief on a cost ceiling for littoral vessels, but made last-minute changes last week to the new price guidelines, saying they won’t kick in until the service ensures Congress the ship program is on track.
Rep. Todd Akin (R-Mo.), ranking member of the House Armed Services Seapower and Expeditionary Forces subcommittee, said he was not comfortable with tweaks to the $460 million-per-ship Littoral Combat Ship (LCS) cost cap the subcommittee approved June 12 during its markup of the fiscal year 2010 defense authorization bill. The modifications don’t change the $460 million ceiling due to start in fiscal year FY ’10, but allow that cap to be adjusted for inflation and remove non-procurement expenditures–such as government costs for oversight and lifecycle management–from being calculated into the cap (Defense Daily, June 15).
So before the HASC granted final approval to the authorization bill on June 17, Akin garnered support from Seapower panel Chairman Gene Taylor (D-Miss.) and others to amend the legislation to require the Navy do several things before the cost cap is modified. Steps the service must take include: requesting the modified cost cap; accepting delivery of the first two LCSs following successful acceptance trials; analyzing the requirements for both LCS variants and determined further changes will not reduce the vessels’ costs or warfighting utility; and ensuring that the FY ’09 ships are in track regarding cost and schedule and their affordability and efficiency is improving.
Akin told Defense Daily he does not want to send the signal that Congress is lessening oversight on the notoriously over-budget and behind-schedule shipbuilding program. Lockheed Martin [LMT] and General Dynamics [GD] are each building variants of the ship.
Akin said he is very supportive of a key part of the LCS language pushed by Taylor calling for opening the LCS program to more competition if one or both of the shipbuilders cannot meet the $460 million ceiling. Specifically, the HASC bill states if the Navy cannot enter into contracts with industry for FY ’10 ships under the cost cap the service must prepare a technical date package for each impacted LCS variant so that other companies can compete to build the ships.
“(Taylor) was saying we’re going to hold them to $460 million, but in reality he was letting them out of probably $80 million to $100 million in government costs which are currently under the cap, (because) when he changes it for ’10, those thing are no longer under the cap,” Akin said, explaining his concerns with the initial Seapower subcommittee bill.
“Well, what we’re simply saying (now) is…the Navy has some specific things that they have to do before we” modify the cost cap, Akin said. He emphasized he wants the Navy to first certify both of the initial LCSs after sea trial and then actually request the cost-cap change.
Taylor co-sponsored Akin’s amendment requiring these additional steps.
“We just wanted to tighten (the cost-cap language) up a little more, get the secretary of the Navy on record as saying, ‘Yeah I want this ship even though the second ship has not yet been delivered and tested,'” Taylor told Defense Daily. “I see it as an additional condition on the secretary of the Navy, trying to rein in the cost on the program, and trying to call for more accountability, more people staking their reputations on this program.”
The Navy and industry are not expected to be able to build the three planned FY ’10 littoral ships under the current cost cap. The service issued a request for proposals last month to General Dynamics and Lockheed Martin for those ships, and the bids are due July 27 (Defense Daily, June 19).
Chief of Naval Operations Adm. Gary Roughead told reporters after a June 4 Senate Armed Services Committee (SASC) hearing that the service will be approaching the four congressional defense panels about possibly modifying the LCS cost cap.
Navy Secretary Raymond Mabus during the SASC hearing said “there’s a realistic prospect that we can drive toward that goal” of the $460 million per-ship cost in FY ’10, but that the way the cost cap is written has made heeding that price “less realistic.” Mabus estimated the Navy would have a better idea of the cost of the FY ’10 ships in “early fall.” (Defense Daily, June 5)
Cost overruns with the initial littoral ship have been blamed largely on the Navy’s changing of requirements and standards. Critics of Taylor’s move to open the program to more competition note doing so would not necessarily solve cost and schedule problems with shipbuilding efforts.
The full House is expected to take up the defense authorization bill this week. The Senate Armed Services Committee plans to mark up its version of the legislation behind closed doors this week.