http://www.businessweek.com/news/2012-04-30/navy-s-littoral-combat-ship-program-may-get-new-scrutiny

Bloomberg News

Navy’s Littoral Combat Ship Program May Get New Scrutiny

April 30, 2012

Leaders of the U.S. Senate Armed Services Committee today asked the Government Accountability Office to expand its probe of the Navy’s $37 billion Littoral Combat Ship program, citing “instability” in the development of the ship’s combat equipment modules.

“With $8 billion already sunk into this program to date without it having delivered a single fully combat-ready ship to support worldwide maritime operations as intended, I remain skeptical about this program and will continue to subject its overall cost, schedule and performance to the vigorous congressional oversight it warrants,” Arizona SenatorJohn McCain, the committee’s senior Republican, said in a written statement.

McCain and Michigan Democratic SenatorCarl Levin, the committee chairman, sent a letter to Gene Dodaro, the U.S. comptroller general, seeking a study that would focus on the ship’s “mission modules,” sets of equipment for specific tasks that are to be integrated into the ship’s seaframe.

Lockheed Martin Corp. (LMT:US), based in Bethesda, Maryland, is leading the construction of one of two ship models in Marinette Marine Corp.’s shipyard in Marinette, Wisconsin. The other version is being built in Mobile, Alabama, by a team led by Austal Ltd. (ASB) of Australia and General Dynamics Corp. (GD:US), based in Falls Church, Virginia. The review would involve both models.

Multiple Missions

The Littoral Combat Ship is intended to clear mines, hunt for submarines and provide humanitarian relief in shallow coastal waters. The Navy plans to have 55 of the ships, which would ultimately make up about 17 percent of the Navy’s total fleet.

The Navy is seeking $2.24 billion in the next fiscal year for four ships, including $429.4 million in development funds.

McCain said a lack of progress in developing the ship’s “mission modules” may “throw the program out of sync and threaten its success.”

Still, McCain said cracks, flooding and corrosion problems on the lead ships have been corrected, and construction costs have declined from a peak of more than $700 million to less than $360 million.

“Over the last year, nearly all of the reported deficiencies have been fixed on the lead ships and design changes have been integrated into the follow-ships with minor cost impact,” McCain said.

The Project on Government Oversight, a nonpartisan government watchdog group that has been critical of the program, issued a report last week based on year-old Navy documents to highlight construction problems.

To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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