Navy official 'embarrassed' by cost overruns on combat ship

Chief of Naval Operations Michael Mullen said Tuesday he is "embarrassed" by hefty cost overruns on the Littoral Combat Ship, but said he expects to get the program back on track as early as next month.

There is "plenty of blame to go around" between the defense industry and Navy officials who failed to adequately oversee the program, Mullen told the House Defense Appropriations Subcommittee during a hearing on the Navy and Marine Corps fiscal 2008 budget request.

The Navy "pressurized" the LCS production schedule and costs projections, setting ambitious goals for the program, Mullen added.

But the Navy's top officer stressed that he wished to "very strongly reaffirm the requirement and the capability" of the program, the first of the military's next generation of surface combatants.

The Navy stopped work on the third LCS ship Jan. 12, after learning that the price tag on the first ship would total roughly $410 million -- well above the $220 million the Navy expects to pay for future ships. The price of the third ship was expected to be much less than the first LCS, but still fall well over $300 million.

Lockheed Martin built the first and third ships, while General Dynamics is on contract to build the second and fourth ships.

The Navy has not determined how it will divvy up work for the 51 remaining Littoral Combat Ships the service intends to buy.

The Navy received funding to buy two LCSs this year, and has requested enough money to buy three of them next year. The service plans to purchase six of the ships each year between fiscal 2009 and fiscal 2012, and another five in fiscal 2013.

Navy Secretary Donald Winter said the service has conducted initial reviews of the program, and its next step is to have a firm understanding of "alternate courses of action," including making changes within the Navy and with the contract.

"All of us are embarrassed by the costs of this LCS," House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., said. "We can't have this happen. As the taxpayers' representative, [I say] you have to get this under control."

Murtha, a strong supporter of the defense industry, used the LCS cost increases as a launching pad to question the Navy on its inability to get many of its major shipbuilding costs under control.

Murtha and other shipbuilding enthusiasts would like the Navy to buy 12 ships in fiscal 2008 -- five more than are in the current budget request. But the Pennsylvania Democrat said he cannot do so until costs come down.

It would be "hard to recommend five more ships when we have this overrun," Murtha said.

Meanwhile, lawmakers also pressed Winter on the Marine Corps' Expeditionary Fighting Vehicle, an amphibious vehicle produced by General Dynamics that has experienced severe problems, including leaks and frequent breakdowns.

Winter said the Navy is tweaking the design to fix the problems. However, he also indicated that the Navy might look for a second contractor to devise another design for the vehicle.

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