Defense Acquisitions
Navy's Ability to Overcome Challenges Facing the Littoral Combat Ship Will Determine Eventual Capabilities Gao ID: GAO-10-523 August 31, 2010The Navy's Littoral Combat Ship (LCS) is envisioned as a reconfigurable vessel able to meet three missions: surface warfare, mine countermeasures, and anti-submarine warfare. It consists of the ship (seaframe) and the mission package it carries and deploys. The Navy plans to invest over $25 billion through fiscal year 2035 to acquire LCS. However, recurring cost growth and schedule delays have jeopardized the Navy's ability to deliver promised LCS capabilities. Based on a congressional request, GAO (1) identified technical, design, and construction challenges to completing the first four ships within current cost and schedule estimates, (2) assessed the Navy's progress developing and fielding mission packages, and (3) evaluated the quality of recent Navy cost analyses for seaframes and their effect on program progress. GAO's findings are based on an analysis of government and contractor-generated documents, and discussions with defense officials and key contractors. This product is a public version of a For Official Use Only report, GAO-10-1006SU, also issued in August 2010.
The Navy faces technical, design, and construction challenges to completing the first four seaframes within current cost and schedule estimates. The Navy and its shipbuilders have learned lessons from construction of the first two seaframes that have positioned them to more effectively construct future vessels. However, technical issues with the first two seaframes have yet to be fully resolved. Addressing these technical issues has required the Navy to implement design changes at the same time LCS 3 and LCS 4 are being built. Incorporating changes during this phase will likely require additional labor hours beyond current forecasts. Together, these challenges may hinder the ability of shipbuilders to apply lessons learned to follow-on ships and could undermine anticipated benefits from recent capital investments in the LCS shipyards. Challenges developing mission packages have delayed the timely fielding of promised capabilities, limiting the ships' utility to the fleet during initial deployments. Until these challenges are resolved, it will be difficult for the Navy to align seaframe purchases with mission package procurements and execute planned tests. Key mine countermeasures and surface warfare systems encountered problems in operational and other testing that delayed their fielding. For example, four of six Non-Line-of-Sight Launch System missiles did not hit their intended targets in recent testing, and the Department of Defense has since canceled the program. Further, Navy analysis of anti-submarine warfare systems has shown the planned systems do not contribute significantly to the anti-submarine warfare mission. These combined challenges have led to procurement delays for all three mission packages. Mission package delays have also disrupted program test schedules--a situation exacerbated by early deployments of initial ships--limiting their availability for operational testing. In addition, these delays could disrupt program plans for simultaneously acquiring seaframes and mission packages. Until mission packages are proven, the Navy risks investing in a fleet of ships that does not deliver promised capability. The Navy entered contract negotiations in 2009 for fiscal year 2010 funded seaframes with an incomplete understanding of LCS program costs. These contract negotiations proved unsuccessful, prompting the Navy to revise its acquisition strategy for the program. The contractors' proposals for construction of the next three ships exceeded the approximate $1.4 billion in funds the Navy had allocated in its fiscal year 2010 budget. In response, the Navy revised its strategy to construct one seaframe design instead of two for fiscal year 2010 ships and beyond in an effort to improve affordability. Navy cost analyses completed prior to the failed negotiations in 2009 lack several characteristics essential to a high-quality cost estimate. These characteristics include the completion of sensitivity and uncertainty analyses and an independent review of the cost estimate. The Navy plans to complete a more comprehensive cost estimate before award of additional ship contracts in 2010. GAO recommends the Secretary of Defense take actions to ensure more realistic cost estimates, timely incorporation of design changes, and coordination of seaframe and mission package acquisition. The Department of Defense concurred with each of these recommendations.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Belva M. Martin Team: Government Accountability Office: Acquisition and Sourcing Management Phone: (202) 512-4285GAO-10-523, Defense Acquisitions: Navy's Ability to Overcome Challenges Facing the Littoral Combat Ship Will Determine Eventual Capabilities
This is the accessible text file for GAO report number GAO-10-523
entitled 'Defense Acquisitions: Navy's Ability to Overcome Challenges
Facing the Littoral Combat Ship Will Determine Eventual Capabilities'
which was released on August 31, 2010.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as
part of a longer term project to improve GAO products' accessibility.
Every attempt has been made to maintain the structural and data
integrity of the original printed product. Accessibility features,
such as text descriptions of tables, consecutively numbered footnotes
placed at the end of the file, and the text of agency comment letters,
are provided but may not exactly duplicate the presentation or format
of the printed version. The portable document format (PDF) file is an
exact electronic replica of the printed version. We welcome your
feedback. Please E-mail your comments regarding the contents or
accessibility features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
August 2010:
Defense Acquisitions:
Navy's Ability to Overcome Challenges Facing the Littoral Combat Ship
Will Determine Eventual Capabilities:
GAO-10-523:
GAO Highlights:
Highlights of GAO-10-523, a report to congressional requesters.
Why GAO Did This Study:
The Navy‘s Littoral Combat Ship (LCS) is envisioned as a
reconfigurable vessel able to meet three missions: surface warfare,
mine countermeasures, and anti-submarine warfare. It consists of the
ship (seaframe) and the mission package it carries and deploys. The
Navy plans to invest over $25 billion through fiscal year 2035 to
acquire LCS. However, recurring cost growth and schedule delays have
jeopardized the Navy‘s ability to deliver promised LCS capabilities.
Based on a congressional request, GAO (1) identified technical,
design, and construction challenges to completing the first four ships
within current cost and schedule estimates, (2) assessed the Navy‘s
progress developing and fielding mission packages, and (3) evaluated
the quality of recent Navy cost analyses for seaframes and their
effect on program progress. GAO‘s findings are based on an analysis of
government and contractor-generated documents, and discussions with
defense officials and key contractors. This product is a public
version of a For Official Use Only report, GAO-10-1006SU, also issued
in August 2010.
What GAO Found:
The Navy faces technical, design, and construction challenges to
completing the first four seaframes within current cost and schedule
estimates. The Navy and its shipbuilders have learned lessons from
construction of the first two seaframes that have positioned them to
more effectively construct future vessels. However, technical issues
with the first two seaframes have yet to be fully resolved. Addressing
these technical issues has required the Navy to implement design
changes at the same time LCS 3 and LCS 4 are being built.
Incorporating changes during this phase will likely require additional
labor hours beyond current forecasts. Together, these challenges may
hinder the ability of shipbuilders to apply lessons learned to follow-
on ships and could undermine anticipated benefits from recent capital
investments in the LCS shipyards.
Challenges developing mission packages have delayed the timely
fielding of promised capabilities, limiting the ships‘ utility to the
fleet during initial deployments. Until these challenges are resolved,
it will be difficult for the Navy to align seaframe purchases with
mission package procurements and execute planned tests. Key mine
countermeasures and surface warfare systems encountered problems in
operational and other testing that delayed their fielding. For
example, four of six Non-Line-of-Sight Launch System missiles did not
hit their intended targets in recent testing, and the Department of
Defense has since canceled the program. Further, Navy analysis of anti-
submarine warfare systems has shown the planned systems do not
contribute significantly to the anti-submarine warfare mission. These
combined challenges have led to procurement delays for all three
mission packages. Mission package delays have also disrupted program
test schedules”a situation exacerbated by early deployments of initial
ships”limiting their availability for operational testing. In
addition, these delays could disrupt program plans for simultaneously
acquiring seaframes and mission packages. Until mission packages are
proven, the Navy risks investing in a fleet of ships that does not
deliver promised capability.
The Navy entered contract negotiations in 2009 for fiscal year 2010
funded seaframes with an incomplete understanding of LCS program
costs. These contract negotiations proved unsuccessful, prompting the
Navy to revise its acquisition strategy for the program. The
contractors‘ proposals for construction of the next three ships
exceeded the approximate $1.4 billion in funds the Navy had allocated
in its fiscal year 2010 budget. In response, the Navy revised its
strategy to construct one seaframe design instead of two for fiscal
year 2010 ships and beyond in an effort to improve affordability. Navy
cost analyses completed prior to the failed negotiations in 2009 lack
several characteristics essential to a high-quality cost estimate.
These characteristics include the completion of sensitivity and
uncertainty analyses and an independent review of the cost estimate.
The Navy plans to complete a more comprehensive cost estimate before
award of additional ship contracts in 2010.
What GAO Recommends:
GAO recommends the Secretary of Defense take actions to ensure more
realistic cost estimates, timely incorporation of design changes, and
coordination of seaframe and mission package acquisition. The
Department of Defense concurred with each of these recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-10-523] or key
components. For more information, contact Belva Martin at (202) 512-
4841 or martinb@gao.gov.
[End of section]
Contents:
Letter:
Background:
Ongoing Development of Key Seaframe Systems Could Impede Efficient
Construction of Initial Follow-On Ships:
Mission Package Delays Limit Ship Capabilities in the Near Term and
Pose Risk to Efficient Execution of Program Acquisition and Test Plans:
Incomplete Cost Analyses in the LCS Program Have Undermined Program
Progress:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: GAO Methodology Used to Perform Cost Estimating Analysis:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Systems Included in the Baseline LCS Mine Countermeasures,
Surface Warfare, and Anti-Submarine Warfare Mission Packages:
Table 2: Cost Growth on Initial LCS Seaframes:
Table 3: Delays in Delivering Initial LCS Seaframes:
Table 4: Navy's Progress Developing and Fielding Mine Countermeasures
Mission Package Systems:
Table 5: Navy's Progress Developing and Fielding Surface Warfare
Mission Package Systems:
Table 6: Navy's Progress Developing and Fielding Key Mission Package
Support Aircraft:
Table 7: Extent to Which the Navy's Total Ownership Cost Baseline
Estimate for LCS Procurement Was Well-Documented, Comprehensive,
Accurate, and Credible:
Figures:
Figure 1: LCS Seaframes:
Figure 2: Operational Concept for LCS Mine Countermeasures Systems:
Figure 3: Operational Concept for LCS Surface Warfare Systems:
Figure 4: Recent Changes to Navy Mission Package Procurement Plans:
Figure 5: Schedule of Key Near-term Events as Outlined in the LCS
Program's 2009 and 2010 Acquisition Strategies:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 31, 2010:
The Honorable Solomon Ortiz:
Chairman:
The Honorable J. Randy Forbes:
Ranking Member:
Subcommittee on Readiness:
Committee on Armed Services:
House of Representatives:
The Honorable Gene Taylor:
Chairman:
The Honorable W. Todd Akin:
Ranking Member:
Subcommittee on Seapower and Expeditionary Forces:
Committee on Armed Services:
House of Representatives:
The Navy's Littoral Combat Ship (LCS) is envisioned as a vessel able
to be reconfigured to meet three different mission areas: mine
countermeasures, surface warfare, and anti-submarine warfare. Its
design concept consists of two distinct parts--the ship itself
(seaframe) and the mission package it carries and deploys. The Navy
currently plans to invest over $25 billion to acquire LCS seaframes
and mission packages through fiscal year 2035. However, recurring cost
growth and schedule delays in the program have jeopardized the Navy's
ability to deliver promised LCS capabilities.
In light of these developments, you asked us to evaluate LCS planning
and implementation efforts. In response to this request, we (1)
identified technical, design, and construction challenges to
completing the first four seaframes within current cost and schedule
estimates; (2) assessed the Navy's progress developing and fielding
mission packages; and (3) evaluated the quality of recent Navy cost
analyses for seaframes and their effect on program progress. This
product is a public version of a For Official Use Only report, GAO-10-
1006SU, also issued in August 2010.
To identify challenges to completing the first four seaframes, we
analyzed Department of Defense and contractor-generated documents that
addressed technical challenges and cost and schedule performance for
LCS seaframes including sea trial reports for the first two ships,
construction progress briefings, and monthly contract performance
reports. We corroborated this information through discussions with
officials responsible for managing LCS design and construction
activities including Navy program officials, technical authorities,
and requirements officers; LCS prime contractors and shipbuilders; and
the Office of the Secretary of Defense. To assess the Navy's progress
developing and fielding mission packages, we reviewed documents that
outline LCS mission package plans and performance including program
schedules and recent test reports. We also held discussions with Navy
program offices and Department of Defense agencies responsible for
acquiring and testing key LCS mission systems to gather additional
information on remaining risks to mission package development and
integration. To evaluate the quality of recent Navy cost analyses, we
compared the Navy's total ownership cost baseline estimate for the LCS
program against the characteristics inherent in high-quality cost
estimates as outlined in our cost estimating and assessment
guide.[Footnote 1] In addition, we interviewed LCS cost analysts and
program officials to supplement our analysis and gain additional
visibility into the Navy's process for developing its cost estimate. A
more detailed description of our scope and methodology is presented in
appendix I.
We conducted this performance audit from July 2009 to August 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
LCS is designed to move fast and transport manned and unmanned mine
countermeasures, surface warfare, and anti-submarine warfare systems
into theater. For LCS, the seaframe consists of the hull; command and
control systems; automated launch, handling, and recovery systems; and
certain core combat systems like an air defense radar and 57-
millimeter gun. The Navy is procuring the first four ships in two
different designs from shipbuilding teams led by Lockheed Martin and
General Dynamics. Lockheed Martin and General Dynamics currently build
their designs at Marinette Marine and Austal USA shipyards,
respectively. Figure 1 shows the first two LCS seaframes, USS Freedom
(LCS 1) and USS Independence (LCS 2).
Figure 1: LCS Seaframes:
[Refer to PDF for image: 2 photographs]
USS Freedom (LCS 1):
USS Independence (LCS 2):
Sources: Lockheed Martin (left); General Dynamics (right).
Note: LCS 1 is a steel monohull while LCS 2 is an aluminum trimaran.
[End of figure]
The Navy is embedding LCS's mine countermeasures, surface warfare, and
anti-submarine warfare capabilities within mission packages. These
packages are comprised of unmanned underwater vehicles, unmanned
surface vehicles, towed systems, and hull-and helo-mounted weapons.
Table 1 identifies the systems included in the LCS mission packages.
Table 1: Systems Included in the Baseline LCS Mine Countermeasures,
Surface Warfare, and Anti-Submarine Warfare Mission Packages:
Mine Countermeasures Mission Package:
Airborne Laser Mine Detection System;
Airborne Mine Neutralization System;
AN/AQS-20A Sonar;
Remote Minehunting System;
Coastal Battlefield Reconnaissance and Analysis System;
Organic Airborne and Surface Influence Sweep System;
Rapid Airborne Mine Clearance System;
Unmanned Surface Vehicle with Unmanned Surface Sweep System.
Surface Warfare Mission Package:
MK 46 30-Millimeter Gun System;
Non-Line-Of-Sight Launch System and Missiles[B];
Maritime Security Module.
Anti-Submarine Warfare Mission Package[A]:
Multi-Function Towed Array;
Remotely Towed Active Source;
Multi-Static Off-Board Source;
Remote Multi-Mission Vehicle;
Unmanned Surface Vehicle;
Unmanned Surface Vehicle Dipping Sonar;
Unmanned Surface Vehicle Towed Array System.
Source: Navy.
Note: Aviation assets and support equipment including the MH-60R
helicopter, MH-60S helicopter, MQ-8B Vertical Take-off and Landing
Tactical Unmanned Aerial Vehicle, mission package computing
environment, and stowage containers are not included.
[A] The Navy is evaluating new configurations for future anti-
submarine warfare mission packages.
[B] The Navy planned to employ the Army's Non-Line-of-Sight Launch
System and Missiles to provide LCS with a small boat engagement
capability, but the program was canceled in May 2010 because of
performance and cost problems. The Navy is evaluating alternative
weapon systems to replace the Non-Line-of-Sight Launch System and
Missiles.
[End of table]
Fundamental to the capability of the LCS seaframe is its ability to
move quickly ahead of other ships and deploy its offboard sensors to
secure lanes of transit. To deploy LCS's mine countermeasures and anti-
submarine warfare systems, the Navy will rely extensively on (1)
automated launch, handling, and recovery systems embedded in each
seaframe and (2) helicopters and unmanned aerial vehicles. The Navy's
acquisition approach is to populate initial versions of mission
packages with a mixture of developmental and production-representative
systems, gradually moving to all production-representative systems
that constitute the baseline configuration for each package. The Navy
plans to procure 55 seaframes and 64 mission packages (24 mine
countermeasures, 24 surface warfare, and 16 anti-submarine warfare) as
part of the LCS program.
The Navy has required LCS seaframes to meet Level 1 survivability
standards. Ships built to Level 1 are expected to operate in the least
severe environment, away from the area where a carrier group is
operating or the general war-at-sea region. These vessels should also
maintain good handling in bad weather--including seas above 30 feet
high (sea state 8)[Footnote 2]--and have systems for fighting fires on
board the ships, hardening against electromagnetic pulses, and
protection against chemical, biological, or radiological
contamination. Unlike surface warships like cruisers and destroyers,
Level 1 ships (including LCS) are not designed to maintain their
mission capabilities after incurring substantive damage. Current ships
in the fleet built to the Level 1 standard include material support
ships, mine-warfare vessels, and patrol combatants.
Two broad categories of contract types are available for government
procurements, including ship procurement: fixed-price and cost-
reimbursement. Fixed-price contracts provide for a firm price or, in
appropriate cases, an adjustable price that may include a ceiling
price, a target price, or both. This contract type places the risk on
the contractor, who generally bears the responsibility of increased
costs of performance. Cost-reimbursement contracts provide for payment
of allowable incurred costs, to the extent prescribed in the contract.
This contract type places most of the risk on the government, which
may pay more than budgeted should incurred costs be more than expected
when the contract was signed.
The Navy awarded cost-reimbursable contracts for detail design and
construction of the first two seaframes--LCS 1 and LCS 2--in December
2004 and October 2005 for $188.2 million and $223.2 million,
respectively. It later exercised options on each of these contracts in
June and December 2006 for construction of the third and fourth ships
(LCS 3 and LCS 4). However, changing technical requirements, evolving
designs, and construction challenges increased the government's
estimated prices at completion for the LCS 1 and LCS 2 seaframes to
about $500 million each. This cost growth precipitated concern within
the Navy that similar outcomes were possible for LCS 3 and LCS 4. In
response, the Navy reassessed program costs and structure, revisited
the acquisition strategy for future ships, and entered into
negotiations with its shipbuilders to convert the LCS 3 and LCS 4
contracts into fixed-price contracts. The Navy was unable to reach
agreement with its shipbuilders on fixed-price terms for these ships,
subsequently leading the Navy to terminate, in part, the LCS 3 and LCS
4 contracts in April and November 2007 for the convenience of the
government. In March and May 2009, the Navy awarded new fixed-price
contracts for LCS 3 and LCS 4. According to the Navy, work completed
and materials procured under the terminated original contract options
for LCS 3 and LCS 4--totaling approximately $192 million--are not
included in the current contract values for those ships.
In our work on shipbuilding best practices, we found that achieving
design stability before start of fabrication is a key step that
leading commercial shipbuilders and ship buyers follow to ensure their
vessels deliver on-time, within planned costs, and with planned
capabilities.[Footnote 3] Leading commercial firms assess a ship
design as stable once all basic and functional design activities have
been completed. Basic and functional design refers to two-dimensional
drawings and three-dimensional, computer-aided models (when employed)
that fix the ship's hull structure; set the ship's hydrodynamics;
route all major distributive systems including electricity, water, and
other utilities; and identify the exact positioning of piping and
other outfitting within each block of the ship. At the point of design
stability, the shipbuilder has a clear understanding of both ship
structure as well as ship electrical, piping, and other systems that
traverse individual blocks of the ship. To achieve design stability,
shipbuilders need suppliers (also called vendors) to provide complete,
accurate system information prior to entering basic design. This
vendor-furnished information describes the exact dimensions of a
system or piece of equipment going into a ship, including space and
weight requirements, and also requirements for power, water, and other
utilities that will have to feed the system.
As is typical for all ships, the LCS construction phase includes
several steps: block fabrication, assembly and outfitting of blocks,
block erection, launch, and delivery. During block fabrication, metal
plates are welded together into elements called blocks. Blocks are the
basic building units for a ship, and when completed they will form
completed or partial compartments, including accommodation space,
engine rooms, and storage areas. Blocks are generally outfitted with
pipes, brackets for machinery or cabling, ladders, and any other
equipment that may be available for installation at this early stage
of construction. This allows a block to be installed as a completed
unit when it is welded to the hull of the ship. Installing equipment
at the block stage of construction is preferable because access to
spaces is not limited by doors or machinery, unlike at later phases.
Blocks are welded together to form grand blocks and then erected with
other grand blocks in a drydock or, in the case of LCS, in a building
hall. Finally, once the ship is watertight and the decision is made to
launch--or float the ship in water--the ship is then towed into a quay
or dock area where final outfitting and testing of machinery and
equipment like main engines will occur. Afterwards, the ship embarks
on sea trials where performance is evaluated against the contractually
required specifications and overall quality is assessed. Following sea
trials, the shipyard delivers the ship to the buyer.
LCS 1 was delivered to the Navy in September 2008, with LCS 2
following in December 2009. The Navy has also accepted delivery of
five partial mission packages to date. Currently, LCS 1 is on
deployment, LCS 2 is undergoing post-delivery work, and LCS 3 and LCS
4 remain in different stages of construction. In addition, development
and testing activities for the mine countermeasures, anti-submarine
warfare, and surface warfare mission packages continue. The Navy
deployed LCS 1 two years ahead of its previous schedule and prior to
the ship completing initial operational test and evaluation. The Navy
also stated that early deployment is possible for LCS 2.
Initial operational test and evaluation is intended to assess a weapon
system's capability in a realistic environment when maintained and
operated by sailors, subjected to routine wear-and-tear, and employed
in typical combat conditions against a simulated enemy who fights
back. During this test phase, the weapon system is exposed to as many
actual operational scenarios as possible--a process that reveals the
weapon system's capabilities under stress. Once the fleet has attained
the ability to effectively employ and operate the weapon system,
initial operational capability is achieved.
Until September 2009, the Navy planned to continue buying both ship
designs. In September 2009, the Navy announced it was revising the LCS
program's acquisition strategy and would select one seaframe design
before awarding contracts for any additional ships. In the National
Defense Authorization Act for Fiscal Year 2010, Congress mandated a
$480 million cost cap for each LCS, starting with fiscal year 2011
funded seaframes.[Footnote 4] In an effort to comply with this
mandate, Navy officials have stated that a major program review
(milestone B)--and completion of an independent cost estimate--will
precede further contract awards in the program.
Cost estimates are necessary for government acquisition programs, like
LCS, for many reasons: to support decisions about funding one program
over another, to develop annual budget requests, to evaluate resource
requirements at key decision points, and to develop performance
measurement baselines. A cost estimate is a summation of individual
cost elements, using established methods and valid data, to estimate
the future costs of a program, based on what is known today. The
management of a cost estimate involves continually updating the cost
estimate with actual data as they become available, revising the
estimate to reflect changes, and analyzing differences between
estimated and actual costs--for example, using data from a reliable
earned value management system.
Ongoing Development of Key Seaframe Systems Could Impede Efficient
Construction of Initial Follow-On Ships:
The Navy faces technical, design, and construction challenges to
completing the first four seaframes within current cost and schedule
estimates. The Navy and its shipbuilders have learned lessons from
construction of the first two seaframes that can be applied to
construction of future vessels. However, technical issues with the
first two seaframes have yet to be fully resolved, posing risk of
design changes to follow on ships already under construction.
Addressing these technical issues has required the Navy to implement
design changes at the same time LCS 3 and LCS 4 are being built.
Incorporating changes during this phase may disrupt the optimal
construction sequence for these ships, requiring additional labor
hours beyond current forecasts. Together, these challenges may hinder
the ability of shipbuilders to apply lessons learned to follow on
ships and could undermine anticipated benefits from recent capital
investments in the LCS shipyards.
Cost Growth and Schedule Delays Have Hampered Construction of the
First Four Ships:
Initial LCS seaframes have required more funding and taken longer to
construct than the Navy originally planned. The Navy has accepted
delivery of the first two ships (LCS 1 and LCS 2), which, according to
the Navy, reduces the likelihood of additional cost increases and
schedule delays on those ships. Further, the Navy's decision to
partially terminate, and later re-award, construction contracts for
follow-on ships (LCS 3 and LCS 4) changed the planned delivery dates
for those ships. Tables 2 and 3 highlight the cost growth and schedule
delays associated with the first four ships of the class.
Table 2: Cost Growth on Initial LCS Seaframes: Dollars in millions:
LCS 1;
Initial budget: $215.5;
Fiscal year 2011 budget: $537.0;
Total cost growth: $321.5;
Cost growth as a percent of initial budget: 149.2%.
LCS 2;
Initial budget: $256.5;
Fiscal year 2011 budget: $607.0[A];
Total cost growth: $350.5;
Cost growth as a percent of initial budget: 136.6%.
LCS 3-4;
Initial budget: $1,260.7[B];
Fiscal year 2011 budget: $1,357.7;
Total cost growth: $97.0;
Cost growth as a percent of initial budget: 7.7%.
Source: GAO analysis of President's budget data.
Note: Fiscal year 2011 budget figures identified for LCS 1 and LCS 2
exclude funding associated with certain design, planning, and program
management activities for these ships. These funds total $170.0
million and $177.0 million for LCS 1 and LCS 2, respectively.
[A] Total excludes Department of Defense reprogramming actions in July
2010 that added $5.256 million in funding to complete post-delivery
work on LCS 2.
[B] Initial budget figure for LCS 3 and LCS 4 reflects the total
Shipbuilding and Conversion, Navy (SCN) funds the Navy requested in
fiscal year 2009 to construct two LCS seaframes plus the value of
funds and materials applied from the two canceled, fiscal year 2006
funded LCS seaframes. Congress originally appropriated $440 million in
fiscal year 2006 to construct these two ships.
[End of table]
Table 3: Delays in Delivering Initial LCS Seaframes:
Ship: LCS 1;
Initial planned delivery date: January 2007;
Current estimated/actual delivery date: September 2008;
Total construction delays: 20 months.
Ship: LCS 2;
Initial planned delivery date: October 2007;
Current estimated/actual delivery date: December 2009;
Total construction delays: 26 months.
Ship: LCS 3;
Initial planned delivery date: November 2012;
Current estimated/actual delivery date: February 2012;
Total construction delays: N/A.
Ship: LCS 4;
Initial planned delivery date: January 2013;
Current estimated/actual delivery date: April 2012;
Total construction delays: N/A.
Source: GAO analysis of President's budget data.
Note: Initial planned delivery dates for LCS 3 and LCS 4 reflect the
planned schedules for two fiscal year 2009 funded LCS seaframes.
Previously, the Navy funded these two ships in fiscal year 2006 and
expected deliveries in October 2008. The Navy's decision to partially
terminate construction contracts for the two fiscal year 2006 ships,
coupled with Congress's decision to rescind appropriations for one
fiscal year 2008 funded seaframe, account for several months of
schedule gains realized for LCS 3 and LCS 4.
[End of table]
First Two Seaframes Delivered to the Fleet, but Technical Challenges
Currently Limit Their Capabilities:
The Navy accepted delivery of LCS 1 and LCS 2 with both seaframes in
an incomplete state and with outstanding technical issues. After
experiencing significant cost increases and schedule delays on these
ships, the Navy judged it more cost efficient to accept the incomplete
ships and resolve remaining issues post-delivery. According to Navy
officials, this step afforded the Navy more control over remaining
work and provided the ability to use repair yards that charge less
than the builder in some instances. Although the ships are currently
in service, the Navy continues to address technical issues on each
seaframe. Addressing these issues has required the Navy to schedule
extensive post-delivery work periods for each ship, which were not
fully anticipated at the time of lead ship contract awards. For
instance, to resolve the LCS 1 issues, the Navy allocated several
months for two industrial post-delivery availability periods in 2009.
A similar schedule is planned for LCS 2.
The Navy has made significant progress resolving LCS 1 deficiencies.
While challenges with several systems were identified at delivery, the
Navy deferred testing of other systems until after delivery. The
shipbuilder had not completed installation of several LCS 1 systems
prior to delivery, contributing to Navy decisions to defer key
elements of the ship's acceptance trials until later.[Footnote 5] Most
notably, the Navy deferred testing of the ship's launch, handling, and
recovery system--a system instrumental to deploying and recovering
mission package elements that, if not performing adequately, will
impair LCS capability. To date, a full demonstration of this system
remains incomplete. Navy simulations to date have identified risks in
safely launching and recovering mission systems that experience
pendulous motion during handling--such as the remote multi-mission
vehicle and unmanned surface vehicle systems. Navy officials stated,
however, that the fleet successfully demonstrated operation and
movement of an embarked 11-meter rigid-hull inflatable boat, having
used one extensively for counterdrug operations in the Caribbean in
March 2010.
Another challenge for LCS 1 launch, handling, and recovery is the
potential for unacceptably high water levels during high sea states in
the waterborne mission zone--the area at the stern end of the ship
designed to launch watercraft through stern doors and down a ramp
directly into the water. Further, LCS 1's launch, handling, and
recovery system has also experienced difficulty safely moving payloads
on the ship. Most notably, payload handling cranes will not be
installed until a future maintenance period in fiscal year 2013.
Like LCS 1, the Navy identified several significant technical
deficiencies on LCS 2 during that ship's acceptance trials. However,
because LCS 2 was only recently delivered (December 2009), the Navy
remains in the early stages of addressing the issues facing that ship.
Similar to LCS 1, the Navy chose to accept delivery of LCS 2 prior to
the shipbuilder completing installation of key systems. The incomplete
condition of the ship contributed to Navy decisions to defer key
elements of acceptance trials until after delivery. As was the case
with LCS 1, these deferments included testing of the LCS 2 launch,
handling, and recovery system for mission watercraft.
LCS 2 is designed to employ a twin boom extensible crane system to
launch, handle, and recover mission watercraft. This system includes
the crane, synthetic lift lines, and a straddle carrier. The synthetic
lift lines attach to the crane to retrieve watercraft, but remain an
unproven, new capability to the Navy. Another risk to the system is
the ability of the straddle carrier to interface with, maneuver, and
return to stowage the rigid-hull inflatable boat, remote multi-mission
vehicle, and unmanned surface vehicle systems--three of the largest
watercraft the Navy plans to embark on LCS 2. According to the Navy,
the straddle carrier was used to successfully move the remote multi-
mission vehicle and unmanned surface vehicle during onboard trials in
March 2010.
Continuing Design Changes Could Hinder Efficient Construction of LCS 3
and LCS 4:
The Navy's efforts to resolve technical issues affecting LCS 1 and LCS
2, implement cost reduction measures, and increase mission capability
have led to design changes for LCS 3 and LCS 4, several of which are
not yet complete. These design changes have affected the configuration
of several major ship systems for LCS 3 and LCS 4 including
propulsion, communications, electrical, and navigation. The Navy is
working to implement these design changes concurrent with LCS 3 and
LCS 4 construction activities. Incorporating design changes on the
lead seaframes while the follow-on ships are under construction may
disrupt the optimal construction sequence for LCS 3 and LCS 4,
requiring additional labor hours beyond current forecasts. As we have
previously reported, by delaying construction start until basic and
functional design is completed and a stable design is achieved,
shipbuilders minimize the risk of design changes and the subsequent
costly rework and out-of-sequence work these changes can drive.
[Footnote 6]
Benefits Derived from Recent Process Improvements and Capital
Investments in the LCS Shipyards May Not Be Fully Realized on Early
Follow-On Ships:
The Navy and its shipbuilders learned valuable lessons from the
construction of the lead ships that can save time and money on the
construction of follow-on ships. The shipbuilding teams have
implemented process improvements based on these lessons and made
capital investments in their yards in an effort to increase
efficiency. Despite the various improvements to capacity and processes
at the shipyards, capitalizing on these improvements might be
challenging given the significant design changes still occurring in
the program. As technical issues are resolved on the lead seaframes,
this, in general, leads to redesign--and potentially costly rework--
for initial follow-on ships. Thus, while efficiencies will be gained
as a result of the shipyards' improvement, remaining technical issues
on the seaframes will likely continue to jeopardize the Navy's ability
to complete the first four seaframes within planned cost and schedule
estimates.
Mission Package Delays Limit Ship Capabilities in the Near Term and
Pose Risk to Efficient Execution of Program Acquisition and Test Plans:
Challenges developing and procuring mission packages have delayed the
timely fielding of promised capabilities, limiting the ships' utility
to the fleet during initial deployments. Until these challenges are
resolved, it will be difficult for the Navy to align seaframe
purchases with mission package procurements and execute planned tests.
Key mine countermeasures and surface warfare systems have encountered
technical issues that have delayed their development and fielding.
Further, Navy analysis of LCS anti-submarine warfare systems found
these capabilities did not contribute significantly to the anti-
submarine warfare mission. These challenges have led to procurement
delays for all three mission packages. For instance, key elements of
the surface warfare package remain in development, requiring the Navy
to deploy a less robust capability on LCS 1. Mission package delays
have also disrupted program test schedules--a situation exacerbated by
decisions to deploy initial ships early, which limit their
availability for operational testing. In addition, these delays could
disrupt program plans for simultaneously acquiring seaframes and
mission packages. Until mission package performance is proven, the
Navy risks investing in a fleet of ships that does not deliver
promised capability.
Challenges Developing LCS Mission Package Systems Have Delayed Their
Planned Fielding Dates:
Development efforts for most of these systems predate the LCS program--
in some cases by 10 years or more. Recent testing of mission package
systems has yielded less than desirable results. To date, most LCS
mission systems have not demonstrated the ability to provide required
capabilities. Further, the Navy has determined that an additional
capability will be incorporated into future anti-submarine warfare
mission packages. The existing anti-submarine warfare mission package
procurement is temporarily suspended, and performance will be assessed
during at-sea testing in 2010. In addition to the sensors, vehicles,
and weapons included in each mission package, each LCS will rely on
aircraft and their support systems to complete missions.
Mine Countermeasures:
Mine countermeasures missions for LCS will involve detecting,
classifying, localizing, identifying, and neutralizing enemy sea mines
in areas ranging from deep water through beach zones.[Footnote 7] We
have previously reported on challenges the Navy faces in transitioning
the mine countermeasures mission to LCS.[Footnote 8] Figure 2
illustrates how the Navy plans to employ the LCS mine countermeasures
systems against mine threats.
Figure 2: Operational Concept for LCS Mine Countermeasures Systems:
[Refer to PDF for image: illustration]
Depicted in the illustration:
Mine threats:
Near Surface mines (0‘ to 30‘ from surface);
In Volume mines (30‘ from surface to 150‘ from bottom);
Close-tethered mines (30‘ to 150‘ from bottom);
Close-close tethered mines (
