The Navy’s Argument for Building Another $500 Million Combat Ship Doesn’t Hold Water
Policy + Politics

The Navy’s Argument for Building Another $500 Million Combat Ship Doesn’t Hold Water

Austal USA

Under pressure from the White House, the Navy recently agreed to add a second Littoral Combat Ship to its latest budget despite grave concerns about the capabilities of the vessel. The stated reason was to save jobs and safeguard the U.S. shipbuilding industry. However, both shipyards that build the LCS already have major backlogs, raising questions about the plan to build more ships.

In late May, the Navy’s original budget request for 2018 included funding for one Littoral Combat Ship, the high-tech vessel that has been widely decried as a flawed answer to the need for small, close-to-shore vessels to hunt subs, clear mines and take some of the low-end mission burden off destroyers, cruisers and other large combatants.

There are two variants of the LCS, the Freedom produced by the team of Lockheed Martin and Fincantieri Marinette Marine in Wisconsin and the Independence built by Austal USA in Alabama. Both have been the subject of intense criticism by the General Accounting Office and by powerful voices on Capitol Hill, including Senate Armed Services Committee Chairman John McCain (R-AZ), for not living up to expected combat capabilities.

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In a report last April, the GAO wrote that with “28 LCS delivered, under contract, or funded, the Navy plans to wind down the LCS program—with the last contract awards expected in 2017.” The Navy originally planned to build 52 LCSs.

When the White House heard that only a single LCS remained in the 2018 budget, red flags went up, according to Defense News. Senior Trump officials, including Stephen Miller, a former top aide to Sen. Jeff Sessions of Alabama – now Attorney General – worried there would be shipyard layoffs.

So pressure was exerted on the Office of Management and Budget and the Navy to bump the number up to two LCSs. Almost overnight, the service found $500 million that could be diverted to build a second ship.

Now some members of the House and Senate, including Sen. Tammy Baldwin (D-WI), are pushing for three LCSs in the 2018 budget. Baldwin has warned that including only one LCS would lead to a loss of more than 1,850 jobs across her state.

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The website of Austal USA spun the switch to two LCSs this way on June 26: “As a clear sign of confidence in Austal USA’s Littoral Combat Ship program, the U.S. Navy on Friday awarded the company a construction contract to build an additional LCS. The specific value of the contract is under the congressional cost cap of $584 million per ship.”

However, at a Senate Armed Services Committee hearing on June 15 that examined the Navy’s decision to amend its budget and add another LCS, Sen. McCain saw things a little differently, according to Stars and Stripes.

“One of the great disasters I’ve seen recently was the LCS. Cost overruns more than doubled the cost of each LCS. Development costs for the ships and their modules now exceed $6 billion and keep rising. Meanwhile key war-fighting capabilities of the LCS including mine countermeasures and anti-submarine have fallen years – I repeat years – behind and remain unproven,” McCain said.

Defense News quoted a source as saying that the main consideration was “maintaining the industrial base” and said the White House worried that some 1,000 jobs shipyard jobs might be lost if the LCS construction pipeline dried up before construction of the new frigate began.

Political concerns about layoffs in two states that Donald Trump carried to win the presidency – Alabama and the crucial Wisconsin – seem to be helping keep the LCS program alive. But how real are those threatened job losses?

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In its April report, the GAO said that LCS construction delays at both the Lockheed Martin and Austral shipyards, in some cases for more than a year, combined with the fact that 13 ships are in various stages of completion and three more were set to begin being built this year, pushes the shipyard workload into 2021.

John Torrisi, a spokesman for Lockheed, said that Marinette Marine currently has eight LCSs under construction and materials are being procured for a ninth.

None of those numbers include the extra LCS added by anxious White House operatives or the third being pushed by some representatives and senators.

In an email to The Fiscal Times on Monday, Michele Mackin, the managing director of acquisition and sourcing management at the GAO who oversaw the April report, said: “Regarding shipyard capacity, we stand by our point that the two LCS shipbuilders had a notable backlog of LCS construction and pending construction due to rather significant schedule delays at both yards. Hence, we made the point that a delay in awarding the frigate would have minimal effect on the shipyards because they already had a lot of construction work to accomplish.”

However, one argument for maintaining a backlog is that if orders are not stacked up, not all parts of the shipyard crew are working.

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Another argument for throwing more work to the shipyards is that the U.S. needs to maintain a competitive, home-grown industry. If, for example, Lockheed/Marinette and Austal were not in the game, the Navy would have less leverage to hold down costs.

But neither Austral USA nor Marinette Marine are entirely American companies. Austal is Australian-owned, and Marinette’s parent is the Italian shipbuilder Fincantieri.

As McCain said when he was questioning Admiral John Richardson, chief of naval personnel, about the last-minute decision to fund a second LCS: “There’s more, admiral, than meets the eye, I say with great respect.”