FY11 - FY15 LCS Cost Estimates

Zachary Peterson at Inside the Navy (subscription only) appears to have obtained several PPTs on surface warfare planning related to the FY2011 FYDP. Reading a PPT without the presentation can sometimes be like reading tea leaves. Reading a news article based on a PPT is reading tea leaves, but the reporting is very solid in detail and gives enough information to speculate a little.

A LCS slide dated August 5th, apparently briefed by RADM Frank Pandolfe, listed out some costing information on LCS. These numbers are subject to adjustment.

The Navy is short $183 million in FY-11 and $718 million through FY-15 for “LCS challenges,” states a slide describing the top 25 unfunded “issues” from FY-11 through FY-15 within the service’s surface warfare enterprise.

A separate slide from Pandolfe’s briefing outlines the Navy’s LCS procurement plans from FY-11 to FY-15. The service plans to buy three LCS’s in FY-11, three in FY-12, four in FY-13 and FY-14 and six in FY-15.

The slide goes on to list specific figures to account for the $718 million from FY11-FY15:

• $54 million for corrections and completion of the first two LCS vessels
• $260 million for seaframe and mission package “wholeness,” or integration
• $148 million for new construction spares
• $137.5 million for the LCS interim support plan and multiship, multi-option requirement (MSMO) for maintenance (1st two vessels only)
• $96.4 million toward life-cycle sustainment
• $12.7 million for MH-60 helicopter integration
• $9.5 million for crew replacement and training

At first glance, I am sure people think this is too expensive, but I think most of this makes sense. We knew the life-cycle sustainment and maintenance levels for LCS either had better be high, particularly early in the ships shakedown as they are learning this stuff, or the numbers would be unrealistic. We also knew crew replacement and training is going to be expensive (and that number could be low IMO) because this hybrid crew / sea swap strategy is an integrated part of the ship, and won't be cheap. The integration for seaframe and mission packages has been an expected expense, that was always going to be fairly expensive early in the program since all of this is basically new concept. Finally, the MH-60 integration looks about right considering this is for two very different ship hulls.

I'll leave it to the comments to weigh in opinions on the $148 million for new construction spares, I think that number seems expensive, but this is first in two classes. What I think is interesting is the $54 million for corrections and completion of the first two LCS vessels. Considering this is for two brand new hulls, one a brand new hull form, that number strikes me as low and I think, is encouraging.

It is easy to say - HOLY CRAP, $718 million!! - but given how LPD-17 entered the fleet I am pleased to see a number that comes in averaging around $72 million per ship, per year for first 2 ships, each of a unique design. That suggests to me that these estimates are realistic, instead of what we have seen in the past where the Navy underestimates the cost of getting a ship for deployment and looks for all kinds of money later to the everlasting frustration of Congress.

One thing that would be useful is breaking down how much of this $718 million number are costs specific to the first in class hulls. I would suspect the integration numbers are much higher for these ships than for future ships, but that MSMO figure is probably an educated guess and very likely to change.