Tuesday, November 2, 2010

Handicapping Littoral Combat Ship Decision

This is news, according to Reuters:

Top U.S. defense officials will probably meet this week to review the Navy's new Littoral Combat Ship program, a spokeswoman said.

The meeting of the Pentagon's high-level Defense Acquisition Board, which has been postponed several times, should clear the way for the Navy to award a $5 billion contract for its new class of modular coastal warships, according to industry executives and Navy officials.
Get ready for a curveball folks, because this will not go as you expect. Similar to how Robert Farley did a bit of handicapping on the Queen Elizabeth class carriers a few weeks ago, I will attempt something similar with the Littoral Combat Ship.

Down-Select as Planned: The current plan is for the upcoming meeting to select one of the two LCS designs, and build 10 ships at one shipyard and 5 ships at another with separate prime contractors and separate shipyards. This was an interesting idea that just doesn't seem well aligned with the reality of US navy shipbuilding. The biggest problem with this idea is how it tied the combat system to the individual hull, because by doing so it virtually declared the Lockheed Martin version of the LCS the winner by default. That means the competition would be challenged by Austal through the GAO, and there is virtually no way the GAO can say the competition was fair when the combat system competition that never happened became such an influential factor in the shipbuilding competition - after the fact. The other big problem is that if the Navy picks the Austal design, it will be very hard to find that second shipyard. Odds on the Down-Select as Planned: 5-2

Build Neither Design as Designed: The Navy is shrinking and needs hulls, and whether one likes the design of the Littoral Combat Ship or not, there is not an alternative the Navy could build anytime soon. With the added bonus of being able to obtain fixed price contracts, the Navy has a much better idea of the costs associated with building Littoral Combat Ships at a rate of 2 per year for both designs, as it was the 2 per year contract both teams bid on. There is also a credibility issue here for many Navy leaders, and canceling this program would destroy the reputation of too many Navy leaders to count. Odds on Building Neither Design: 10-1

Build Both Using Both Bids: The Navy has a fixed cost bid to build 10 Austal Littoral Combat Ships and a fixed cost bid to build 10 Lockheed Martin Littoral Combat Ships at a rate of 2 per year for the next 5 years, which was supposed to begin in FY2011 but will probably be delayed until FY2012 (with some margin of adjustment with the Senate yet to vote). I think this option is on the table with the plan being to put the Austal version on the East Coast and the Lockheed Martin version on the West Coast to standardize maintenance for the platforms. The idea behind this plan would be to use the money never allocated, and unlikely to ever be allocated, for the 11th LPD-17 and shift it over to the Littoral Combat Ship program to fill in the budget gap that gets created by adding more hulls, while also increasing the number of ships to be built over the next 5 years. The support by the Marine Corps for smaller platforms like the Littoral Combat Ship (and a future armed version of the JHSV) makes this an appealing alternative to a future more nimble Marine Corps. Odds of Building Both Using Both Bids: 2-1

Could something else happen? Sure, you wouldn't believe the rumors I have heard, but I think the best way for the Navy to move forward is to build 10 of each hull over the next 5-6 years and continue testing as mission modules get sorted out. This approach solves several issues:
  1. It avoids the certainty of a GAO protest by the loser
  2. It appeals to the broadest number of elected officials
  3. It increases the size of the Navy sooner rather than later
  4. It gives the Navy the much needed ~24 hull count (12 of each) needed to replace minesweepers
  5. It keeps both hull versions alive for exports
  6. It transforms the LCS program back into an operational testing program for innovation
  7. It keeps multiple smaller shipyards involved in building smaller warships
  8. It gives the Navy enough size for each class that there are no orphan vessels
  9. It allows the Navy to streamline maintenance for important components by consolidating classes to coasts with other new vessels (Rolls-Royce turbines on both LM LCS and DDG-1000, for example)
  10. It restores credibility to the CNO (and other leaders) regarding original intent of the program
Makes a lot of sense to me, so much sense in fact that while I give it the best odds - I think someone will find a way to mess it up.

blog comments powered by Disqus

site stats