Categories  Policy US DoD

US NAVY LCS: life-cycle cost is a major issue

Navy Secretary Ray Mabus said yesterday the service is keeping a mid-April deadline for industry bids on the Littoral Combat Ship (LCS), amid concerns about the losing shipbuilder protesting the contract award and a call from one side to delay the schedule.
Some observers predict the loser of the two-way contest between Lockheed Martin and General Dynamics teams, which have each built early LCSs, will protest the Navy’s contract award to government auditors. The service has set an April 12 date for the two industry teams in the contest to build the next 10 littoral ships. The Navy also plans to allow additional shipbuilders to compete to build future versions of the selected ship design.

Sen. Richard Shelby (R-Ala.) made an unsuccessful request to the Navy during a budget hearing yesterday to delay the April 12 due date for LCS proposals until the Congressional Budget Office (CBO) provides a requested assessment. He supports General Dynamics’ bid to build 10 all-aluminum trimaran LCSs at Mobile, Ala.-based Austal USA. Shelby joined other Alabama lawmakers March 11 in requesting the CBO investigate the total lifecycle costs of the LCSs. They argue the LCS request for proposals (RFP) does not address “critical factors” related to the total-ownership costs and technical capabilities of the two competing designs, and claim Lockheed Martin’s steel ship would have higher lifecycle operating costs than General Dynamics’ aluminum version.

“I’m concerned, Mr. Secretary about fuel efficiency, which is a big cost,” Shelby said yesterday during a Senate Appropriations Defense subcommittee (SAC-D) hearing on the Navy and Marine Corps’ fiscal year 2011 budget requests.
Shelby charged if the RFP is not amended, to include an evaluation factor that considers energy-consumption costs, the ship acquisition would not jibe with Mabus’ statements regarding considering energy costs in contracting.
Mabus said the LCS was designed with total-ownership costs in mind.

Fuel savings are shown when the littoral ships are used at very high speeds, and the Navy “very infrequently” plans to use the vessels at such high speeds, the Navy secretary said. Chief of Naval Operations Adm. Gary Roughead reiterated this point to reporters after the hearing, saying there is not a huge divergence in fuel consumption between the two LCS classes.
Mabus told the panel he stands by “the current RFP, which stresses the cost to purchase the ship, so that we can get enough of these ships.”
“Both variants, we believe, meet every requirement that we have, not only operationally but also in terms of life-cycle costs going forward,” he added.

Shelby asked the Navy to delay the April 12 due date for LCS bids until the CBO responds to the Alabama lawmakers’ request for a LCS review. Mabus after the hearing told reporters the current RFP schedule stands.

SAC-D member Sen Herb Kohl (D-Wis.) during the hearing countered Shelby’s claims that the Lockheed Martin-Marinette Marine semi-planing monohull LCS, built in his state, would cost the Navy more to operate.

Kohl charged the General Dynamics LCS has a “radical” design, rendering its operating costs difficult to estimate. He also raised concerns about the aluminum LCS, saying the Navy does not traditionally use the metal he implied would not be as stable as steel.

“It seems in very real sense that we’re comparing apples and oranges,” Kohl said about the competing LCS designs.

Mabus responded that the Navy does not “foresee any significant issues for either variant” and is focused on keeping down LCS costs down so the service can buy 55 of them.
Kohl asked if aluminum ships are more expensive to fix than steel vessels, because of a shortage of aluminum-trained welders at shipyards. Mabus, though, said welding for the two metals is similar and thus training for aluminum can be arranged.

Navy leaders after the hearing told reporters they have high confidence in the LCS RFP. Mabus said modifying the RFP would lead to delays that would raise “real concerns” regarding building and fielding the LCSs when needed. He noted the Navy already extended the due date for proposal by two weeks to answer contractors’ questions.
“We think both sets of builders have had adequate time to look at this and to get their proposals in in time,” Mabus said.

Roughead said a protest of the contract decision “would be extraordinarily disruptive to [the] ability of the fleet to accomplish it missions in the future.”

Defense Daily – By Emelie Rutherford

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