By Geoff Fein
With the defense industry facing uncertainties about the FY ’10 defense budget, one question making the rounds at last week’s Surface Navy Association (SNA) symposium was whether the Navy would be able to reach its proposed 313-ship fleet.
While Navy officials at SNA were optimistic the 30-year shipbuilding plan would reach its target of at least 313 ships, Navy Secretary Donald Winter told reporters at a briefing last Friday that challenges remain.
“I am hopeful we are on a path that will prove to be adequate,” Winter said. “There are so many uncertainties, however, in terms of out-year funding, for example, that it’s hard to give a definitive answer to that.”
Winter spoke with reporters one week before he gives his farewell address. He has agreed to stay on until March 13, or until a new Navy secretary is seated, to assist the Obama administration with its transition.
“Getting [to 313], getting there in a timely manner, and getting there in a timely manner with manageable risk, there are many ways of looking at it,” he noted.
The Navy has some good actions that will help it move forward more quickly toward 313, Winter said.
“I am hopeful and cautiously optimistic that LCS will prove to be a cost effective approach to expanding our plate,” he added. “It’s not coming in at the cost that we originally hoped…[we] understand [and] accept that. But at the same time, [we] have yet to see what I believe are the likely cost savings that will occur with acquiring that ship in quantity.”
In the early stages of the program, the Navy had envisioned LCS costing $220 million (in FY ’05 dollars). Since then, the total cost of the ship has escalated to over $500 million.
In the FY ’06 National Defense Authorization Act, lawmakers had placed a $220 million cost cap on the fifth and sixth LCS for each seaframe. In May 2007 the Navy acknowledged it was going to seek an increase to the cap, raising it to $460 million per ship, to better reflect the cost of procuring additional vessels (Defense Daily, May 10, 2007).
“It’s unfortunate there were [overly] optimistic estimates that were given,” Winter said. “We still have very clearly a vessel here which is a small fraction the cost of other surface combatants, and which provides a degree of flexibility by way of its modularity that will enable us to adapt it to a very uncertain future mission mix, and also let us evolve the system in a very significant way.”
In late 2008 the Navy issued a revised request for proposal for the two FY ’09 ships, after bids received earlier in the year were unable to provide a complete ship given the cost cap, sources have said.
The Navy has said that under the FY ’09 procurement, both the General Dynamics [GD]-led team and the Lockheed Martin [LMT]- led team would each be awarded one ship.
Contract awards for those ships were expected to occur before the beginning of 2009. Winter said last week the Navy is still in negotiations with both LCS teams.
The Navy intends to hold a concurrent competition for quantity in FY ’10 (Defense Daily, Oct. 17).
Even though the number of ships being procured is increasing from FY ’09 to FY ’10, the Navy is still a far cry from where it had planned to be under the original LCS acquisition strategy.
Back in 2006, the Navy’s plans called for a build rate of six LCS per year beginning in FY ’09 and running to FY ’12, according to the service’s ship construction plan (Defense Daily, Jan. 31, 2006).
That rate was to fluctuate between five and six ships between FY ’13 and FY ’16, the Navy said in 2006.
But a number of challenges, including the increase in cost to build LCS, surfaced along the way. Additionally, the Navy terminated contracts for both LCS-3 and -4 after the service and the two LCS teams were unable to reach an agreement on a new fixed price incentive contract.
“Yes, we canceled two, but the objective of that was to put the program on a proper disciplined development track,” Winter said. “Our objective here is not to buy two or four LCS. Our objective here was to buy 55 LCS, and making sure we were on a path that would give us good value and a product that we wanted for that fleet. [That] was going to be more important than just trying to move ahead given the uncertainties we saw at the time.”
That was a balance, he added.
The issue here is far less associated with getting a ship out and deployed to theater and more associated with ensuring that the Navy has the right ship and the right capability to be able to replicate in quantity in a cost effective manner and be able to develop, provide, and maintain the presence that the service wants around the world, Winter added.
Winter noted the Navy is already seeing demand for LCS. For example, the Marine Corps is taking a close look at it, he added.
“When people start realizing and understanding some of the capabilities that are accomplished by this ship and some of the flexibilities associated with it, and we will learn more, and we’ll be able to understand and be able to modify [it] ,” he said. “That’s okay, because the system was designed to afford that type of capability.”
In the case of the Marine Corps, they are looking at how they can use the existing platform, Winter said.
“The system is designed to accomodate different modules, different capabilities. It provides access, support, volume, speed…and within those parameters there is a hell of a lot that can be done,” he said. “And the combination of the air component capabilities, the fact you have a good-sized flight deck and hangar in both variants, as well as the ability to deploy small boats, gives you some tremendous potential from the standpoint of amphibious operations, which is a core Marine Corps interest area.”
Winter added that both he and Marine Commandant Gen. James Conway are looking at this from the standpoint of how does the Navy and Marine Corps team take advantage of LCS, as opposed to questioning how the ship should be modified.
“Modifications will come by way of the modules, and in the same way we convert from surface warfare to anti-submarine warfare operations to mine warfare…the idea of putting on modules to enable amphibious warfare seems a logical extension of these capabilities,” Winter added.
“The modularity is a huge factor. Yes, it’s good that this is a very shallow draft, high-speed vessel. That is an enabling feature for littoral operations,” he said. “From the basic enabling capability there are features that are important here. But the real benefit I think is going to come from the whole modular construct, and the ability to not only carry but deploy capability both in the air and in the water.”