Navy overhauls troubled ship program


Navy officials said on Wednesday that they have discussed the changes with leaders of defense panels in the House and Senate. Lawmakers have been frustrated with the program after the cost of one littoral combat ship more than doubled, to at least $460 million for one ship. The Navy plans to buy 55 of the shore-hugging combat vessels.

Now the Navy is looking to award a large number of ships across several years to one contractor and down the line build competition between two selected shipyards to construct the ships more cheaply.

"This change to increase competition is required so we can build the LCS at any affordable price," said Ray Mabus, the Secretary of the Navy. "LCS is vital to our Navy's future. It must succeed."

Before Navy officials announced the changes on Wednesday, two teams -- one led by Lockheed Martin and one led by General Dynamics -- were each slated to build ships in fiscal 2010. The Navy was planning to buy three ships in 2010.

Essentially, the Navy is now scrapping its procurement plans for fiscal 2010 and reopening the competition. The winner of the renewed competition will build up to 10 ships through fiscal 2014. The winning shipyard will build two ships a year.

The Navy is also going to start another competition for a second builder of the ships in fiscal 2012. That second shipbuilder will build five ships through fiscal 2014.

The first shipyard that wins the contract in 2010 cannot compete in 2012, explained Sean Stackley, the assistant secretary of the Navy for research, development and acquisition.

Because the Navy will own most of the technical data packages and rights to the ship design, in fiscal 2015 it will allow the two shipyards to compete to build the follow on ships.

The Navy will issue a request for proposal this fall and is looking at a contract award around April.