Specialist in Naval Affairs
The Littoral Combat Ship (LCS) is a relatively inexpensive Navy surface combatant that is to be equipped with modular "plug-and-fight" mission packages. The basic version of the LCS, without any mission packages, is referred to as the LCS sea frame. The Navy wants to procure a total of 55 LCSs.
There are currently two LCS designs—one designed and produced by an industry team led by Lockheed, and one designed and produced by an industry team led by General Dynamics. The first ship in the program—LCS-1, funded in FY2005 and built to the Lockheed design—was commissioned into service on November 8, 2008. The second ship in the program—LCS-2, funded in FY2006 and built to the General Dynamics design—was delivered to the Navy on December 18, 2009, and is scheduled to be commissioned into service on January 16, 2010. LCS- 3 (being built to the Lockheed design) and LCS-4 (being built to the General Dynamics design) were funded in FY2009 at a combined cost of $1,020 million and are under construction. The Navy's proposed FY2010 budget, submitted in May 2009, requested $1,380 million for the procurement of three more LCSs—an average of $460 million per ship, which at the time was the unit procurement cost cap for LCSs procured in FY2010 and subsequent years.
On September 16, 2009, the Navy announced a proposed new strategy for acquiring LCSs procured in FY2010 and subsequent years. Under the Navy's proposed strategy, the Navy would reduce the number of LCSs to be procured in FY2010 from three to two, and would hold a pricebased competition to pick a single design to which all LCSs procured in FY2010 and subsequent years would be built. (The process of selecting the single design for all future production is called a down select.) The winner of the down select would be awarded a contract to build 10 LCSs over the five-year period FY2010-FY2014, at a rate of two ships per year. The Navy would then hold a second competition—open to all bidders other than the shipyard building the 10 LCSs in FY2010-FY2014—to select a second shipyard to build up to five additional LCSs to the same design in FY2012-FY2014 (one ship in FY2012, and two ships per year in FY2013-FY2014). These two shipyards would then compete for contracts to build LCSs procured in FY2015 and subsequent years.
FY2010 defense authorization act (H.R. 2647/P.L. 111-84: The conference report (H.Rept. 111- 288 of October 7, 2009) on H.R. 2647 contains three provisions relating directly to the LCS program: Section 121 provides the Navy the contracting authority to implement the LCS acquisition strategy that the Navy announced on September 16, 2009, and amends the LCS unit procurement cost cap to $480 million per ship, with provisions for adjusting that figure over time to take inflation and other events into account. Section 122 requires the LCS program to be treated as a major defense acquisition program (MDAP) for purposes of program management and oversight. Section 123 requires a report on the Navy's plan for homeporting LCSs.
FY2010 Department of Defense appropriations act (H.R. 3326/P.L. 111-118): The explanatory statement for H.R. 3326/P.L. 111-118 provides $1,080 million for the procurement of two LCSs, or an average of $540 million per ship. The explanatory statement states that a rescission of $84.8 million in FY2009 Other Procurement, Navy (OPN) funding that is made by Section 8042 of the act includes a rescission of $66 million for LCS mission modules.
Date of Report: December 22, 2009
Number of Pages: 73
Order Number: RL33741
Document available electronically as a pdf file or in paper form.
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Friday, January 8, 2010