Defense Science Board on "Buying Commerical"

The Defense Science Board has a new report titled Buying Commercial: Gaining the Cost/Schedule Benefits for Defense Systems (PDF) where it lists the Littoral Combat Ship under the catagory Examples of “Unsuccessful” Procurements.

The Littoral Combat Ship (LCS) concept emphasizes speed, a flexible mission module space, and a shallow draft. The design is intended to replace slower and larger specialized ships, such as minesweepers and larger assault ships.

This level of speed and maneuverability is intended to enable ships to be deployed faster and to have improved tactical strike and evasive capacities.

Capabilities include a flight deck and hangar large enough to base two SH-60 Seahawk helicopters, the ability to recover and launch small boats from a stern ramp, and enough cargo volume and payload to deliver a small assault force with armored vehicles to a roll-on/roll-off port facility.

To achieve this mission, six 90-day concept studies were awarded in November of 2002 and three contracts were awarded in May 2004. After restructuring in 2007, the LCS program is poised to commission two operational Navy ships six years after contract award. While both contractors (Lockheed Martin and General Dynamics) have experienced substantial cost overruns, the reasons for these are complex.

Both defense contractors worked with commercial high-speed ship builders—Lockheed with Marinette Marine and General Dynamics with Austal. Difficulties on both teams can be traced to lapses in planning, communication, and leadership on all sides of the process. Of primary relevance to the terms of reference for this task force was the development of the U.S. Navy-sanctioned Naval Vessel Rules that added new requirements after designs were completed and building was initiated.

A high-speed ship such as the LCS is a substantial departure from typical navy designs. Commercial interest in high-speed transport—ships that can travel a more than 30 knots—is making new hull designs and jet propulsion technology viable options to improve passenger ferries and short-distance cargo transport. However, because efficiency drives long-distance shipping, the extended highspeed requirements of the LCS are unique and very demanding. LCS is expected to travel at over 40 knots for a sustained distance of 1,600 nautical miles.

Unfortunately, development of the Naval Vessel Rules began late and, while they were developed quickly given their scope, the final rules were provided to the contractors only a week before contracts were awarded, well after designs were finalized and construction schedules were determined. Although the draft rules were available four months earlier, the number of technical requirements almost doubled—from 15,261 in the draft to 29,435 in the final rules. Even considering the substantial reengineering effort, none of the parties involved, including the government program office and certifying authority, fully understood the impact of these requirements until after ship construction began.

One of the core drivers for the affordability of the LCS was the reliance on traditionally commercial shipyards to perform the construction work. Confusion over the mission and design requirements, however, negated many commercial advantages. Examples include the requirement to self-deploy in Sea State 8 conditions, a requirement far above anything a commercial littoral ship would encounter. This required a full redesign of both ship hulls. Another example presented was the fire suppression systems. Redundant automated systems were initially proposed, as these are standard on commercial ships. The Naval Vessel Rules, however, required the ability to access all ship areas to manually fight a fire, which led to substantial redesigns of subsystems and of physical access throughout the ship.

For these reasons, the commercial advantages were not fully realized in the initial production, although eventual benefits are anticipated. Each ship is estimated to cost more than $500 million, more than doubling the original cost requirement of $220 million.

The same report goes on to cite the Sea Fighter FSF-1 as an examples of a "Successful" Procurement.

The Sea Fighter (FSF-1) is an experimental littoral combat ship deployed by the U.S. Navy. It is able to operate in both blue and littoral waters using either dual gas turbine engines for speed or dual diesel engines for efficient cruising. The ship can be easily reconfigured using interchangeable mission modules. As such, helicopters can land and launch on its deck and smaller water craft can be carried and launched from its stern.

The Sea Fighter was built as an experiment by Nichols Bros. Boat Builders in Freeland, Washington, under contract to Titan Corporation, a subsidiary of L-3 Communications. It was ordered in 2003 and launched in 2005, 29 months from concept to a ship in the water. In 2008, the Sea Fighter was renamed the FSF-1 and commissioned for Navy duty for a total cost between $180 and $220 million.

The success of this effort can be attributed to a lack of hard requirements. The ship was intended as a research project to test design limits; it included an innovative seaframe, communications systems, and weapons configurations. The requirements document “fit on less than one page” and the designers utilized full commercial practices. The ship was commissioned under commercial American Bureau of Shipbuilding classification rules; military certification was not a factor until the ship was deployed.

The purpose of this program was to provide incentives and guidance for subsequent procurements—specifically, the LCS program. The effort demonstrated a wide range of innovative capabilities, including the previously unexplored feasibility of the aluminum hull trimaran design of the LCS2.

I wonder where the Defense Science Board got the $180-$220 million number from. Do we get that number after adding all the earmarks set aside by Duncan Hunter for this project? Probably FY09 numbers I'd guess? I don't know those answers.

Very interesting, if Sea Fighter costs $180-$220 million for a ship built to ABS standards (although I'm pretty sure the ship is being evolved to a NVR spec during its current dock period, or so I remember reading somewhere) and comes in ~1000 tons, maybe $550 million for the LCS at ~3000 tons is about right? Small Navy ships have a long history of high cost, the MCH and MCMs were terribly expensive to build, on a per ton basis both are higher than LCS-1.

It should be noted that contrary to all the talk of 'shoot for the moon' capabilities, every technology on both LCS hull forms were mature, and yet costs grew way beyond what the Navy estimated the LCS to be. Clearly planning, communication, and leadership in the procurement process is at least as important as technical maturity.