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Navy Littoral Combat Ship (LCS) Program: Background, Issues, and Options for Congress

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Navy Littoral Combat Ship (LCS) Program: Background, Issues, and Options for Congress Navy Littoral Combat Ship (LCS) Program: Background, Issues, and Options for Congress Ronald O'Rourke Specialist in Naval Affairs April 29, 2011 Congressional Research Service 7-5700 www.crs.gov RL33741 CRS Report for Congress Prepared for Members and Committees of Congress Navy Littoral Combat Ship (LCS) Program Summary The Littoral Combat Ship (LCS) is a relatively inexpensive Navy surface combatant equipped with modular “plug-and-fight” mission packages. The Navy wants to field a force of 55 LCSs. The first two LCSs (LCS-1 and LCS-2) were procured in FY2005 and FY2006 and were commissioned into service on November 8, 2008, and January 16, 2010. Another two (LCS-3 and LCS-4) were procured in FY2009 and are under construction. Two more (LCS-5 and LCS-6) were procured in FY2010 and are under contract. The Navy’s proposed FY2011 budget requested funding to procure an additional two (LCS-7 and LCS-8). Although the Navy’s FY2011 funding has not yet been fully determined, the Navy announced on March 17 that it had brought these two ships under contract. The Navy’s proposed FY2012 budget requests funding to procure four more (LCSs 9 through 12). Navy plans call for procuring an additional 15 LCSs in FY2013-FY2016 in annual quantities of 4-4-4-3. There are two very different LCS designs—one developed and produced by an industry team led by Lockheed, and another developed and produced by an industry team led by General Dynamics. The Lockheed design is built at the Marinette Marine shipyard at Marinette, WI; the General Dynamics design is built at the Austal USA shipyard at Mobile, AL. On November 3, 2010, the Navy notified congressional offices that it was prepared to implement a dual-award acquisition strategy under which the Navy would award each LCS builder a 10-ship contract for the six-year period FY2010-FY2015. The Navy stated that, compared to an earlier down select strategy that the Navy had announced in September 2009, the dual-award strategy would reduce LCS procurement costs by hundreds of millions of dollars. The Navy needed additional legislative authority from Congress to implement the dual-award strategy. Congress granted the authority in Section 150 of H.R. 3082/P.L. 111-322 of December 22, 2010, an act that, among other things, funded federal government operations through March 4, 2011. On December 29, 2010, the Navy implemented the dual-award strategy, awarding a 10-ship, fixed-price incentive (FPI) block-buy contract to Lockheed, and another 10-ship, FPI block-buy contract to Austal USA. LCSs 5 through 8 are the first four LCSs executed under the two block-buy contracts. Current issues for Congress concerning the LCS program include the Navy’s lack of economic order quantity (EOQ) authority for executing the two block-buy contracts, changes or potential changes to the composition of LCS mission modules announced by the Navy in January 2011, the combat survivability of the LCS, and hull cracking on LCS-1. Congressional Research Service Navy Littoral Combat Ship (LCS) Program Contents Introduction ................................................................................................................................1 Background ................................................................................................................................1 The Program in General ........................................................................................................1 The LCS in Brief.............................................................................................................1 Planned Procurement Quantities......................................................................................2 Two LCS Designs ...........................................................................................................2 Two LCS Shipyards ........................................................................................................4 Unit Procurement Cost Cap.............................................................................................5 Estimated Acquisition Cost .............................................................................................6 Estimated Operation and Support (O&S) Cost.................................................................6 Manning and Deployment Concept .................................................................................7 Major Program Developments...............................................................................................8 Growth in Sea Frame Procurement Costs ........................................................................8 2007 Program Restructuring and Ship Cancellations .......................................................8 2009 Down Select Acquisition Strategy (Not Implemented) ............................................8 2010 Dual-Award Acquisition Strategy (Implemented)....................................................9 2011 Announced Changes in Mission Module Equipment .............................................10 FY2012 Funding Request....................................................................................................13 Issues for Congress ...................................................................................................................13 Lack of Economic Order Quantity (EOQ) Authority for Executing the Block-Buy Contracts .........................................................................................................................13 Announced Changes in Mission Module Equipment............................................................14 Combat Survivability ..........................................................................................................14 General.........................................................................................................................14 Shock Testing................................................................................................................23 Hull Cracking on LCS-1 .....................................................................................................24 Technical Risk ....................................................................................................................26 Sea Frame.....................................................................................................................26 Mission Packages..........................................................................................................27 Total Program Acquisition Cost...........................................................................................29 Separate SAR Reporting of Sea Frame and Mission Module Costs......................................29 Operational Concepts..........................................................................................................30 Legislative Activity for FY2012 ................................................................................................33 FY2012 Funding Request....................................................................................................33 Figures Figure 1. Lockheed LCS Design (Top) and General Dynamics LCS Design (Bottom)..................3 Tables Table 1. Construction Status of LCSs ..........................................................................................5 Table A-1. Congressional Action on FY2011 Funding Request ..................................................36 Congressional Research Service Navy Littoral Combat Ship (LCS) Program Table D-1. Status of LCSs Funded in FY2005-FY2009 .............................................................52 Table F-1. Navy and CBO Estimates of Ship Procurement Costs Through FY2015 Under Down Select and Dual-Award Strategies ................................................................................74 Appendixes Appendix A. Legislative Activity for FY2011............................................................................34 Appendix B. Summary of Congressional Action in FY2005-FY2011.........................................42 Appendix C. Cost Growth on LCS Sea Frames in FY2007-FY2012 Budgets .............................44 Appendix D. 2007 Program Restructuring and Ship Cancellations.............................................50 Appendix E. Down Select Acquisition Strategy Announced in September 2009.........................53 Appendix F. Dual-Award Acquisition Strategy Announced in November 2010...........................67 Contacts Author Contact Information ......................................................................................................78 Congressional Research Service Navy Littoral Combat Ship (LCS) Program Introduction This report provides background information and potential issues for Congress on the Littoral Combat Ship (LCS), a relatively inexpensive Navy surface combatant equipped with modular “plug-and-fight” mission packages. The Navy’s proposed FY2012 budget requests funding for the procurement of four LCSs. Current issues for Congress concerning the LCS program include changes or potential changes to the composition of LCS mission modules announced by the Navy in January 2011, the combat survivability of the LCS, and hull cracking on LCS-1. Congress’s decisions on the LCS program could affect Navy capabilities and funding requirements, and the shipbuilding industrial base. Background The Program in General The LCS in Brief The LCS program was announced on November 1, 2001.1 The LCS is a relatively inexpensive Navy surface
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