Recent Littoral Combat Ship News

Navy Times is reporting that the Senate has reduced funding for the JSF and the LCS.

Sen. Daniel Inouye, D-Hawaii, subcommittee chairman, said the JSF cuts are warranted because the program is behind schedule. “I would inform my colleagues that the Defense Department has not yet awarded a contract to build 30 aircraft which the Congress funded nearly a year ago.”

Similarly, with the Navy’s LCS, Inouye said that “two ships funded in 2010 have not yet been contracted. Under the new plan, the Navy would seek to award four ships to a single contractor in the coming year. There is virtually no way that the winning contractor would be able to begin construction of four ships in 2011.”

Funding for one ship in 2011 “is more than adequate,” he said. And it saves $615 million.

Completely expected, and not unreasonable. If you kick your time table down the road, expect funding to get kicked down the road too. Is it worth making the observation that the Littoral Combat Ship has become the reason why the shipbuilding budget is cut at a time when the US Navy is hoping to increase the size of the Navy?

No matter how you look at it though this is not a good development for the US Navy. That $615 million, once lost, won't be coming back next year.

One other LCS note... regarding the reporting surrounding the arms deal with Saudi Arabia.

Another deal, the senior Pentagon official said, could include selling the Saudis naval and ballistic missile-defense weapons systems that could be worth tens of billions of dollars more. The official said the Saudis continue to have internal discussions about those purchases and are watching to see the outcome of a competition to build a new Littoral Combat Ship. The Navy is choosing between two contractors to build the small, maneuverable ship, which operates close to shorelines.

This is either really good or really terrible reporting by Dana Hedgpeth of the Washington Post, and time will tell. It remains unclear to me how much the Saudi's actually care about the Littoral Combat Ship competition, because as best I can tell Saudi Arabia isn't actually interested in either design the US is picking between. What I mean by that is that while Saudi Arabia is interested in both hull forms being offered - my sources tell me that the design of the hull forms would be different than the US design.

The real discussion between the US and Saudi Arabia is over the AEGIS Combat System - Saudi Arabia wants AEGIS, and from what I understand AEGIS is in the offering. However, while they want AEGIS the priority is also MIW. The problem is that only one of the two designs can support AEGIS and a major MIW command capability - the Austal design. Going back to 2005 Saudi Arabia has quietly favored the Austal design over the Lockheed Martin design, although give Lockheed Martin credit for their full court press.

Here is what I think will happen. Lockheed Martin will win the US LCS competition and Saudi Arabia will buy 4 AEGIS frigates based on the Lockheed Martin design, but spend most of their naval money elsewhere. If by some miracle Austal wins, and I say 'by some miracle' because I strongly believe the competition has been fixed from the beginning to insure Lockheed Martin wins, then Saudi Arabia will buy between 4-12 AEGIS frigates from Austal, and may buy several of Austal MRVs as well.

But Lockheed Martin will win and Saudi Arabia will 4 AEGIS frigates. The question after that will be whether Saudi Arabia buys into FREMM for MIW, or shops China.