March 6, 2007:
The U.S. Navy is still
trying to figure out how the costs on its "low cost" Littoral Combat Ship (LCS)
program suddenly ballooned out of control. The navy halted work on building two
LCSs in late January, and fired the officer in charge of the project. Each LCS
was supposed to cost about $200 million. But now the manufacturers says it may
cost more than twice that. This is a serious situation.
There appear to be three reasons for the
sudden, and dramatic, rise in costs. First, there's the Pentagon tradition of
"low balling." When competing to get a contract, the firm with the lowest
plausible price gets the job. This has been going on for generations. Everyone
knows that, once work begins, the manufacturer will deploy his publicists,
lobbyists and accountants to explain that unforeseen events have caused the
actual price to be much higher. Angry speeches will be made in Congress,
embarrassing stories will appear in the media, and the extra money will be
found. Everyone swears that it won't happen again. But it always does. And it
has again with LCS.
Another problem is that LCS is a new ship
design. And new and innovative always costs more. Actually there are two
different LCS designs. One is a semi-planning monohull from Lockheed-Martin.
The other is a trimaran from General Dynamics. LCS 2 was laid down in late
2005. These are essentially prototypes, and serial procurement will probably
not begin before 2008, when initial design flaws will have been worked out. One
of the two designs may be selected for the rest of the LCS class, or, perhaps,
there will be two sub-types. Ultimately, the Navy hopes to have between 50 and
60 LCSs by the middle of the next decade. Much of the new technology is being
taken from the commercial sector. Yes, there is some new ground being broken by
adapting this commercial tech to military use, but this has been done before,
and the costs were supposed to be under control.
The biggest problem is another old one,
and that's the tendency of the navy to keep coming in with "essential changes."
These cost money. The navy knows it is at fault here, and has tried to back off
in this area. But, like low balling, it's a hard habit to break. For the LCS
project, the navy has thrown in a major set of changes. That is the new Naval
Vessel Rules. This harmless sounding program consists of "Environmental
Protection Systems" that were developed to enable the Navy to, "tailor the
level of pollution abatement capability of a new platform to match its mission
and planned concept of operation." In other words, the navy wants all new ships
built a certain way so that it won't have all those environmental lawsuits when
it tries to scrap old warships. The lawsuits and environmental regulations have
become so expensive that the navy, literally, cannot afford to scrap ships any
more. Instead, it keeps them in reserve longer, and then sinks them in weapons
tests, or as barrier reefs offshore (to act as homes for fishes, and tourist
attractions.)
The LCS is sort of replacing the Oliver
Hazard Perry-class frigates (4,100 ton ships that would cost about $100 million
to build today). Well, maybe the Perrys would cost more like $250 million today
(what with the Naval Vessel Rules and all that.) The big difference between the
frigates and LCS is the greater use of automation in the LCS (reducing crew
size to 75, versus 170 in the frigates) and larger engines (giving the LCS a
speed of about 90 kilometers an hour, versus 50 for the frigates.) The LCS also
has a large cargo hold designed to hold different mission packages of equipment
and weapons.
The Littoral Combat Ship is,
simultaneously, revolutionary, and a throwback. The final LCS design is to
displace about 3,000 tons, with a full load draft of under ten feet, permitting
access to very shallow coastal waters, as well as rivers. This is where most
naval operations have taken place in the past generation. Max range for the LCS
is 2,700 kilometers. Built using commercial "smartship" technologies, which
greatly reduce personnel requirements, the LCS is expected to require a crew of
about 50 in basic configuration, but will have accommodations for about 75
personnel. The ship is designed for a variety of interchangeable modules, which
will allow the ships to be quickly reconfigured for various specialized
missions. Crews will also be modularized, so that specialized teams can be
swapped in to operate specific modules.
The navy has not been happy with the
performance of American ship builders. While costs are rising sharply, quality
is down and the admirals can't get satisfactory answers from the manufacturers.
But the fact of the matter is that these sharp cost increases are the fault of
the navy, the manufacturers and Congress (which goes easy on the ship builders
because votes, by the people working in the shipyards, are at stake.) It's
another case of, " we have met the enemy, and it is us.