Thursday, January 7, 2016

LCS: No Way To Run A Multi-Billion Dollar Acquisition Program

US Navy


By Daniel Gouré Ph.D.
Lexington Institute

January 5, 2016 - For critics of the way the Department of Defense (DoD) manages procurement of weapons systems, the Littoral Combat Ship (LCS) program must be the gift that keeps on giving. Just before Christmas, Secretary of Defense Ashton Carter presented the Navy with a Yuletide present in the form of a memorandum that totally upended the program. Instead of a 52 ship procurement target, the Navy was directed to acquire only 40 and no more than 8 of the new, “frigate” variant.  In addition, the Navy was told to terminate its unique acquisition strategy which is based on buying ships built on two very different designs from two teams and pick one for the final 12 LCSs. This decision was taken in order to free up resources for what Secretary Carter judged to be higher Navy acquisition priorities.
The LCS was supposed to be a small, low cost, almost expendable, multi-purpose combatant built largely to commercial ship standards and intended primarily, as its name suggests, for operation in relatively shallow waters close to the world’s littorals. But in addition to addressing the challenge posed by short-range surface threats, the Navy decided to use the LCS to mitigate other shortfalls in the fleet’s capabilities, most particularly shallow water anti-submarine warfare and mine countermeasures. To meet these three missions simultaneously, the Navy came up with the innovative idea of designing the LCS to be modular, a kind of sea-going tool box into which it could place different capabilities packages, called mission modules, depending on the task to be performed. As the mission changed, one set of modules would be taken out and a different set inserted.
From the start, the LCS program was plagued with difficulties. Costs for the basic ship, or sea frame, escalated. This was due, in no small measure, to the Navy’s change of heart when it came to accepting commercial construction standards for a warship. There were design and production problems, inevitable with any new class of ships, much less two. The concept of modularity proved much more difficult in practice and a number of the technologies needed for the different mission modules were less mature than had been thought. There were a host of manning issues and difficulties with the operational concept for the modular ships. Finally, the threat environment changed, raising questions about the utility of a fleet of small, relatively vulnerable and not-so-cheap combatants.
What is in some ways remarkable is that the LCS program managed to surmount many of these difficulties and produce not one, but two, very different designs. Because the two design teams — one led by Lockheed Martin and the other by General Dynamics, and the two ship builders with which they were associated, Marinette Marine and Austal — drastically reduced their prices while improving the quality of their respective products, the Navy decided to acquire both LCS variants.  In recent deployments of one variant, the USS Freedom, in the Pacific, its performance has been judged to be extremely good. Much work has gone into improving the lethality, mission capabilities and even survivability for both variants, leading most recently to the decision to acquire more capable versions of one or both variants, the so-called “frigate.”
It is not merely irony, but tragedy, that just as the LCS program was achieving results, both in terms of moving down the production learning curve and developing operational concepts, it suffers this latest major hit. The two ship builders had invested tens of millions of dollars to modernize their production lines based on the belief in a total program of 52 LCSs. This is similar in many ways to the experience the Air Force had with the F-22 fighter.
The font of all knowledge and wisdom when it comes to the U.S. Navy, Ron O’Rourke of the Congressional Research Service has produced a devastating critique of the way the Navy managed the LCS program for the past 15 years. Written in his always objective and balanced, neutral style, O’Rourke’s December 22, 2015 update of his ongoing coverage of the LCS program makes it clear that the Navy did not perform the required due diligence when it came to justifying and supporting both the decision to acquire the LCS in the first place and then, inexplicably, to revamp the entire program and build modified versions of both variants as frigates. No wonder there has been so much chaos in the program. As with all other CRS assessments of defense programs, this one identifies a host of issues for Congress to consider, including the analytic basis for Secretary Carter’s decision to radically alter the size, character and management of the LCS program yet again.
This is no way to run a multi-billion dollar weapons acquisition program. An avalanche of management missteps over more than a decade now leaves the Navy with a future in which it will have to operate with three undersized fleets: 14 of each variant of the LCS and another 12 of the frigate. This is a sustainment and training nightmare. The most recent decision also undermines the efforts of both ship builders to invest in producibility improvements. This is truly an example of, to use Under Secretary of Defense Frank Kendall’s phrase, acquisition malpractice.

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