Feature 3
55 ships, even at more than US$500
million apiece.
However, restructuring the LCS
procurement plan will delay the
completion of the acquisition programme
until 2019, compared to 2016 in the US
Navy’s 2007 and 2008 plans.
“The adjusted plans are unlikely to
remain valid for long,” said the CSIS.
“The Navy plans no significant increase
in its procurement budget and a decrease
in its overall budget until 2012. Yet, ship
procurement is supposed to accelerate
from seven ships in 2009 to 12 ships
total in 2012.”
The US Navy is trying to secure
a fixed-price contract with the
shipbuilders, but such a contract will be
difficult to reach with either Lockheed The Honourable Donald C Winter, Secretary of the Navy, tours the fi rst LCS, USS Freedom.
Martin or General Dynamics, given the
frequent design and requirement changes.
According to the US Navy, “nearly 600 This cost escalation - and the massive the development time compared to
significant engineering changes affecting instability in the ship configuration and traditional shipbuilding plans. Moreover,
nearly all parts of the ship” have been programme - are another symbol of the the pressure was transferred into a
made so far due to miscalculations US Navy’s “strategy-reality disconnect,” competition between the contractors
regarding requirements. the CSIS report claimed, noting that the who tried to out-perform each other
Much, however, will also depend on problems in the LCS programme are due regarding development time to secure
the future price. The total cost over-run in part to the Navy’s “over-ambitious the contract. Coupled with the US
since the initial cost estimate for the transformational plans”. Navy’s frequent requirement changes,
entire fleet of 55 littoral combat ships will The US Navy sought to implement this virtually forced the contractors to
reach more than US$17 billion by 2019. a plan that envisioned only half re-design and build the ship at the
same time, increasing the cost and
extending the timeline. Development
and production costs have nearly tripled
because of a development process driven
by unrealistic requirements.
More recently, however, said a GAO
report the US Navy has revised the LCS
capability development document to
reduce the speed and endurance range
requirements for the ship.
“It is questionable whether a
crucial component of the US Navy
fleet that comes at a cost three times
its initial estimate and with reduced
key capabilities such as endurance
and speed can fulfil the strategic
requirements it was designed for,” the
CSIS report concluded.
“After 600 engineering changes, over
three years of delay, two cancelled ships
out of the first four planned, and three
times the initial cost of the lead ships, it
is hard to see any strategy, let alone fiscal
planning, behind the LSC acquisition
LCS cost growth FY2005-FY2009. programme,” said the CSIS. WT
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