OCTOBER 17 2008 08:18h
The Navy in August said the first Lockheed ship was ready for inspection, despite 21 problems to be resolved.
Citing congressional changes to a 2009 spending bill, the Navy said it would remove a fiscal 2008 ship from the Littoral Combat Ship (LCS) competition, and add three vessels in fiscal 2010, in addition to awarding each company a second LCS ship in fiscal 2009 that started Oct. 1.
That would bring the total number of LCS orders to five for the next two years, said Navy spokesman Lt. Cmdr. Victor Chen. He said the Navy planned to announce the 2009 contracts in or before January 2009.
The Navy ultimately plans to buy 55 of the smaller, more agile ships despite overruns that have more than doubled the price tag of a ship that was supposed to cost $220 million.
Lockheed and General Dynamics are working on separate designs for the new warships, which are aimed at countering threats in contested coastal waters.
The Navy in August said the first Lockheed ship was ready for inspection, despite 21 problems to be resolved. It gave no details at the time, but the ship's weight has been a topic of concern for some time, said two sources briefed on the issue.
General Dynamics is working on its first LCS ship but recently told the Navy it will not deliver that ship until next year, several months later than expected.
Requirement changes and soaring metals prices sent the price of the first two LCS ships built by Lockheed and General Dynamics to over $500 million each, but the Navy insists they remain a key part of a drive to reach a 313-ship fleet.
The Navy canceled contracts for a second ship from each company after the massive cost overruns on the first ships and later relaunched the competition on fixed-price terms.
Lockheed delivered its first LCS, named Freedom, to the Navy in September. The ship is to be commissioned in Wisconsin on Nov. 8 before sailing to Norfolk, Virginia for more rigorous sea and gun trials.
Initial tests showed the ship weighs six percent more than it should, said Navy spokesman Lt. Clay Doss. He said various changes would be made over the next six months to fix the problem. Sources said the extra weight could make the ship more likely to sink if it suffered severe damage to about 50 feet of its underwater hull length.
Sources briefed on the changes said they would not add to the ship's cost, since post-delivery maintenance had already been included in the budget.
One of the sources said the weight of the ship crept higher mainly because it was being designed and built at the same time. In some cases, that meant duplicate steel foundations and cables were left in place even after equipment was moved.
The Navy said the Lockheed ship demonstrated exceptional speed, stable riding characteristics, and ship handling responsiveness during its acceptance trials. It also showed outstanding manueverability in restricted waters, it said.
Doss said the Navy would be carefully control fuel usage in various tanks and secure all watertight doors to safely operate the ship at its current weight until the changes are made.
Shipbuilding analyst Ronald O'Rourke, of the Congressional Research Service, said it remained to be seen how much of the weight Lockheed could trim and whether it would limit later equipment upgrades during the life of the ship.
The Navy said it remained focused on affordability as it moved toward awarding more LCS contracts.
"Affordability remains a key tenet of the LCS program as the Navy works with industry to provide the greatest capability for the lowest cost," Chen said in a statement.
Adding the three 2010 ships to the competition would put pressure on the two companies to "sharpen their pencils" and rein in costs for all five ships, and could give the Navy early insight into whether the 2010 ships would be able to meet the cost cap, O'Rourke said.
Congress last month passed an appropriations bill that dropped 2008 funding for one LCS ship, and said the Navy could use that money to pay for cost overruns on the two ships in the budget for fiscal 2009.
Lawmakers also agreed to delay a $460 million cost cap on each ship until 2010, after Navy officials said neither company could meet the cap without removing significant equipment from the ships.
The Navy initially hoped to award contracts for three ships -- one in fiscal 2008 and two in fiscal 2009 -- in August. The plan was derailed by the contractors' difficulties in meeting the cost cap, and the later congressional action.
Both companies say they need orders to maintain their workforces. Lockheed's shipbuilder, Marinette Martin, laid off workers this month and says more will occur next month.
Italy's Fincantieri in August said it will acquire the Manitowoc Marine Group, which owns Marinette Marine, from its parent company, Manitowoc Co Lockheed agreed to be a minority investor in the deal.