Skip to comments.GAO Sees Risks in LCS Mission Packages and Developmental Delays
Posted on 12/09/2010 6:52:56 AM PST by sukhoi-30mki
GAO Sees Risks in LCS Mission Packages and Developmental Delays
The Lockheed Martin-led team recently launched the third LCS.
GAO Comments Proposed Dual Award Acquisition Strategy for LCS Program (Excerpts)
09:52 GMT, December 9, 2010 The U.S. Navys Littoral Combat Ship (LCS) is envisioned as a vessel able to be reconfigured to meet three different mission areas: mine countermeasures, surface warfare, and antisubmarine warfare. Its design concept consists of two distinct partsthe ship itself (seaframe) and the mission package it carries and deploys. The Navy is procuring the first four ships in two different designs from shipbuilding teams led by Lockheed Martin and General Dynamics, which currently build their designs at Marinette Marine and Austal USA shipyards, respectively.
Prior to September 2009, the Navy planned to continue building the class using both ship designs. This strategy changed following unsuccessful contract negotiations that same year for fiscal year 2010 funded seaframesan outcome attributable to industry proposals priced significantly above Navy expectations. In September 2009, the Navy announced that in an effort to improve affordability, it was revising the LCS programs acquisition strategy and would select one seaframe design before awarding contracts for any additional ships. Following approval of this strategy in January 2010, the Navy issued a new solicitationintended to lead to a downselectfor fiscal year 2010 seaframes. In support of this strategy, Congress authorized the Navy to procure up to 10 seaframes and 15 LCS ship control and weapon systems. The Navy planned to have a second competition in 2012 and provide five of the ship control and weapon systems to the winning contractor, who would construct up to 5 ships of the same design and install the systems. However, in November 2010, following receipt of new industry proposals for the fiscal year 2010 seaframes, the Navy proposed to change its acquisition strategy back to awarding new construction contracts to both industry teams. According to the Navy, in order to execute this proposed dual 10-ship award, congressional authorization is required. If approved, the Navys authorization would increase from 10 ships to 20 shipsincluding ship control and weapon systems. Absent this authorization, the Navy plans to proceed with a single award for one design by mid-December 2010. [...]
The Navy estimates that both its existing and proposed acquisition strategies will generate significant cost savings to the government. According to the Navy, $1.9 billion in savings resulted from the competition between the two offerors and is common to both strategies. However, the Navy estimates that approximately $1.0 billion in additional cost savings would be realized under the proposed dual award strategy because of the avoidance of higher start-up costs and risks associated with the second source planned for fiscal year 2012, among other factors. According to the Navy, these additional savings would be offset, in part, by increased total ownership costs. The Navy plans to use some of the remaining savings, if realized, to fund construction of an additional LCS seaframe in fiscal year 2012.
The quantities planned under both of the Navys strategies are similar through fiscal year 2015. [...] Under the dual award strategy, the government will be authorized to contract for up to 20 ships. In contrast, the existing downselect strategy limits this authorization to up to 10 ships until fiscal year 2012, when the Navy planned to solicit a second source for additional ships. [...]
MISSION PACKAGE UNCERTAINTIES AND DELAYS
The Navys request to double its current 10-ship authorization to 20 shipsat a time when the mine countermeasures, surface warfare, and antisubmarine warfare mission packages continue to face significant developmental challengeshighlights the Navys risk of investing in a fleet of ships that has not yet demonstrated its promised capability. Absent significant capability within its mission packages, seaframe functionality is largely constrained to self-defense as opposed to mission-related tasks.
Navy officials acknowledged that mission package systems have taken significantly longer to develop and field than anticipated. Underscoring this situation is the fact that development efforts for most of these systems predate the LCS programin some cases by 10 years or more. However, Navy officials expressed confidence that their latest testing and production plans for mission package systems are executable.
Recent testing of mission package systems has yielded mixed results. The Navy reports that two systems within the mine countermeasures mission package recently completed developmental testing, but another system is undergoing reliability improvements following production of several units that did not meet performance requirements. Further, test failures contributed to the cancellation of a key surface warfare mission package system, and the future composition of the package remains undetermined.
Developmental challenges facing individual systems have led to procurement delays for all three mission packages and have disrupted program test schedules. Most notably, the Navy reports the first operational testing event involving a seaframe and partial mission package is now scheduled for late second quarter of fiscal year 2012, and the Navy expects individual mission package systems to remain in development through 2017.
To safeguard against excess quantities of ships and mission packages being purchased before their combined capabilities are demonstrated, we recommended in our August 2010 report that the Secretary of Defense update the LCS acquisition strategy to account for operational testing delays in the program and resequence planned purchases of ships and mission packages, as appropriate. The Department of Defense agreed with this recommendation, stating that an updated schedule was under development to better align seaframe and mission module production milestones. However, it is unclear how the departments concurrence with our recommendation can be reconciled against the Navys current request to increase the planned seaframe commitment, particularly since no operational testing involving mission packagesor any of their individual systemshas since taken place. Until mission package and operational testing progressesand key mine countermeasures, surface warfare, and antisubmarine warfare systems are proven effective and suitable onboard seaframesthe Navy cannot be certain that the LCS will deliver the full capability desired. This risk would increase with a commitment to higher quantities. The Navy believes this increased commitment is appropriately balanced against competing risks in the program.
AGENCY COMMENTS AND OUR EVALUATION
[...] In its comments, the department stated it had assessed the cost of sustaining a two ship class to be less than the costin financial and operational termsof replacing these ships in a future procurement budget request. However, we are unaware of the underlying analysis the department has conducted to support this statement. Navy officials told us recently that they have not undertaken any type of analysis to weigh the potential benefits and drawbacks of retiring the two ships of the nonselected design, despite agreeing with our February 2010 recommendation to conduct such analysis.
Further, the department stated that both LCS designs are now stable, citing the minimal change activity to date for LCS 3 and LCS 4 and the continued availability of change order budgets for those ships. However, our analysis shows that the Navy has deferred several changes affecting key ship systems until post-delivery for LCS 3 and LCS 4a decision that has contributed to the positive, near-term performance the department cites. Further, as the Navy continues to address technical deficiencies affecting the lead shipsgenerally through design changesthe scope of deferred work for follow-on ships can reasonably be expected to grow. Until this scope is fully identifiedand priced into existing and future LCS contractsthe department cannot be fully confident that its budgets for follow-on ships are sufficient to offset the cost increases associated with performing work out of sequence.
The department also emphasized progress it has made developing and testing LCS mission package systems, while at the same time acknowledging that some systems continue to experience developmental issuesnoting that these systems have either been replaced with alternate systems or have become targets of increased Navy focus and attention. According to the department, its mission package approach allows substitute or re-engineered systems to be quickly and seamlessly identified for incorporation into the mission package development stream without impacting overall fielding plans. However, our analysis shows that developmental delays to individual systems have caused all of the LCS mission packagesmine countermeasures, surface warfare, and antisubmarine warfareto experience test disruptions and procurement delays. In fact, none of the mission packageseither in partial or full configurationhas completed operational testing onboard an LCS seaframe. [...] (END OF ABSTRACT)
The full report, including tables, notes and enclosures, can be viewed at: http://goo.gl/6OdEC
Aren’t these ships becoming really vulnerable to shore-based anti-ship missile batteries that are becoming prevalent now?
They’re really vulnerable to pretty much everything, including a nasty look.