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U.S. Navy defends new warship, warns against slowing production

U.S. Navy sailors look at the littoral combat ship USS Freedom as it arrives in Changi Naval Base in this April 18, 2013 photo provided by t
U.S. Navy sailors look at the littoral combat ship USS Freedom as it arrives in Changi Naval Base in this April 18, 2013 photo provided by t

By Andrea Shalal-Esa

WASHINGTON (Reuters) - U.S. Navy officials on Thursday staunchly defended the newest class of U.S. warships despite a spate of technical glitches, and they warned lawmakers that halting funding for the ships or their equipment could drive up costs.

They rejected a report by the Government Accountability Office (GAO) released Thursday that blasted the acquisition program for the Littoral Combat Ships (LCS) as a risky "buy before fly" approach and urged lawmakers to limit funding for more ships until the Navy completed technical studies.

The GAO report raised concerns about the stability of the designs of the two different LCS models being built by Lockheed Martin Corp and Australia's Austal Ltd and questioned progress on three packages of equipment being developed for the ships.

Concerns about the ship and its ability to survive an attack came into sharp focus this week after two of four generators in the USS Freedom, the first ship built by Lockheed, failed as the ship was heading to a bilateral exercise with Singapore, forcing it to return to port.

Maintenance staff were able to repair the ship, allowing it to take part in the exercise, but the incident prompted repeated questions during a hearing about the LCS program by the seapower subcommittee of the House Armed Services Committee.

"While expected in the first of class, the sheer number of casualties associated with the LCS-1 is troubling and needs to be quickly addressed," said Representative Randy Forbes, the Virginia Republican who heads the subcommittee.

Navy acquisition chief Sean Stackley conceded the program began with critical flaws but said the current approach was "following best practices in acquisition, holding requirements stable, holding the design stable, leveraging competition to the fullest." He said the Navy was committed to addressing remaining technical challenges and mitigating risks.

"Now is not the time to slow the program and add cost," Stackley told the hearing.

He said the cost of the ships themselves had been cut in half from the first ships in the program, largely because of a block buy of 20 ships, and the cost of mission modules for hunting mines, detecting submarines and carrying out surface warfare were also coming down. The average cost of the ships in the multiyear agreements with Lockheed and Austal is now around $350 million, roughly half the cost of the first two ships.

The Navy plans to spend $34 billion to buy a total of 52 LCS ships, which were designed to patrol coastal waters while addressing threats like mines and enemy submarines.

Stackley said changing course now by halting funding or slowing production would reverse those cost improvements and set back a program that he said was needed to fill gaps in the Navy's current capabilities and help it expand the current fleet of 286 ships to 300.

Such a move would also jeopardize the high-skilled workforce that is building the ships, he said.

Navy officials say the ship's high speed and slimmer manning requirements will help the Navy respond more quickly to emerging crises around the world. The ship was designed as a "truck" to carry different mission equipment that can be swapped out, and to easily take on additional missions in years to come.

Stackley said the problems with the design of the lead ships had been corrected and design changes had been reduced by up to 90 percent on follow-on ships.

He said three interchangeable mission packages being developed for the ships were on track to deliver the capability needed by the Navy and within preset cost targets.

"Today the greatest risk is that posed by the disruption and delay caused by stop and start and slowdown caused by continuing resolutions, sequestration and other budget reductions," Stackley told the hearing.

SCRUTINY URGED

Paul Francis, managing director of acquisition and sourcing management at the GAO, urged lawmakers to keep a close eye on the program and demand more detailed answers from the Navy before approving funding for the program in fiscal 2014.

"At this point, we're producing at full rate, yet we're still experimenting with the ship," he said, although he said the Navy had time to brief lawmakers on several technical and design studies under way and keep the program on track.

"I don't envision a scenario where the 2014 buy actually gets held up pending these studies," he said, noting that the Navy and GAO "might be in violent agreement" about keeping production of the ships to a minimal rate until operational testing was completed in 2019.

(Reporting by Andrea Shalal-Esa; Editing by Cynthia Osterman)

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