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Littoral Combat Ship Program

Department of Defense reduced the purchase of Littoral Combat Ships (LCS) due to "frequent critical system failures" and being "unsurvivable" in combat. Policy changes were announced in January 2014 by Deputy Secretary of Defense Christine Fox after the Pentagon received its final fiscal year 2015 budget guidance from the White House. The Navy was initially supposed to purchase 52 LCSs, but due to technical problems and budget cuts the fleet will now receive only 32 warships. Three of them were already in use, and the fourth was due to commission in April 2014. An additional 20 were under construction or on order with the two contractors, Lockheed Martin and Austal USA.

As of mid-2001 the Office of Naval Research was considering construction of a Littoral Combat Ship with a displacement of 500 to 600 tons. The LCS would have a draft of about three meters, an operational range of 4,000 nautical miles, and a maximum speed of 50-60 knots. The cost per ship might be at least $90 million. All of these numbers soon changed.

On 6 January 2002, Adm. Vern Clark, the Chief of Naval Operations, proposed buying 10 new ships and 210 new aircraft annually within six years. This would have taken an increase of $10 billion in procurement funds over the existing budget, which was to buy five ships and 88 planes. Clark also called for developing a fleet of new warships, including the small, fast and relatively cheap Littoral Combat Ship. The service's 2003 budget proposal would permit the purchase of just five ships, half the total the Navy needs just to sustain today's fleet of around 315. With the 30 to 60 littoral ships Clark advocated, the total force would reach between 345 and 375.

The Defense Planning Guidance in May 2002 directed the Navy to pursue a new class of small, stealthy "Littoral Combatant Ships" to support troops ashore and to conduct anti-mine, intelligence and reconnaissance operations. The Navy planned to build two "Flight Zero" LCS vessels to refine the new class' concept of operations. More detailed mission modules are to be developed for the Flight One LCS that was hoped would appear soon after 2007. The Navy wanted to buy eight of these ships through 2009, with the first in 2005.

Lockheed Martin Corp (LMT.N) and Australia's Austal (ASB.AX) are in competition for a contract to build 10 of the new warships. In September of 2009, Congress authorized the Navy to downselect between two LCS designs and award one industry team a contract to build up to 10 ships. Butthe Navy would like to do a 10-ship buy with each ship builder, Austal USA in Mobile and Marinette Marine in Wisconsin, adding twenty LCS ships to the Navy's fleet.

A meeting of the Defense Acquisition Board was expected to pave the way for the Navy to award a $5 billion contract. The Navy postponed the meeting a few days to the DAB could consider new information received from the contractors, who submitted final offers with prices good until mid-December 2010. Under the November 2010 proposal, the Navy would split its buy equally each year between Lockheed and Austal USA. Two ships would be awarded under the FY2010 budget [which began October 2009] and two in FY2011 [which began October 2010], with four ships year each from FY2012 through FY2015. One key issue that will be put off appears to be the choice of combat system. Each team created its own system, with virtually no commonality between the two types. Under the new proposal, each team would continue to build ships with their original combat systems.

Total Program Objectives

In the Navy's FY06 plan, the 30-year force structure profile for 260 and 325 ships proposed building 63 and 82 LCS, respectively, covering the period from FY06 to FY36.

As of mid-2006 the Navy's current plans called for a total of 55 of the agile, high-speed LCS ships to be built for the Navy's surface fleet. Each ship would be capable of carrying any one of the mine warfare, anti-submarine warfare or surface mission packages at a given time. In its shipbuilding plan delivered to Congress in February 2007, the Navy outlined plans to procure a total of 23 LCS between FY07 and FY11 at a cost of $6.8 billion and a total of 51 from FY07 to FY16 at an average cost of $270 million. By FY18, the Navy expected to reach a total of 55 LCS.

By early 2006 costs for the Littoral Combat Ship had increased by as much as 29 percent for the first ship and as much as 33 percent for follow-on ships that were intended to be procured in FY09 to FY11. Sea frame procurement costs in the service's FY07 budget had increased from those shown in the FY06 budget. The estimate for the first LCS increased from $212.5 million to $274.5 million, an increase of about 29 percent. The estimate for the second LCS increased from $256.5 million to $278.1 million, an increase of about 8 percent.

Flight 0 would consist of at least twelve or possibly thirteen ships, up from the initial plan of four. A Lockheed-Martin Industry Team and a General Dynamics Industry team would each initially build two ships with follow-on deliveries pending final acquisition strategy for the LCS program. The LCS working in concert with the rest of the fleet, was expected to bring substantially increased capability to the fleet in assuring access to the littorals ands in executing the Navy's Strategy. While designed for three littoral focused missions: anti-submarine warfare, mine warfare and surface warfare, its high speed, open combat system architecture, mission bay and large flight deck provide the capability to support a number of other emergent missions. Moreover, its reduced crew size, modular interchangeable focused mission payloads and revolutionary acquisition process lay the groundwork for the future of naval surface combatants.

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