Lawmaker wants cap on littoral ship costs enforced

House Armed Services Seapower and Expeditionary Forces Subcommittee Chairman Gene Taylor, D-Miss., wants to give the two contractors on the Littoral Combat Ship a "take it or leave it offer" when his panel marks up its portion of the fiscal 2010 defense authorization bill later this week.

Taylor, who has long been frustrated by the cost increases that have plagued the LCS program, said he will require that the ship's two makers, Lockheed Martin Corp. and General Dynamics Inc., adhere to the $460 million cost cap set by Congress in the fiscal 2008 authorization bill.

If the contractors are unable to meet that limit, Taylor wants to reopen the program to competition, he said in an interview Friday. The Navy had originally hoped each of the shallow-water vessels would cost just $220 million.

Navy officials plan to buy 55 Littoral Combat Ships over the next decade, although the program has languished amid severe production problems and cost overruns that sent the price for the first ships soaring above $500 million and led to the cancellation in 2007 of both companies' second ships.

Those ships are under contract again, and the Navy is working to get the price down to the cost cap, officials say.

During a recent interview, Chief of Naval Operations Gary Roughead said the service is making progress bringing costs down on the LCS, but has not yet reached the $460 million threshold for each ship.

"The challenge for us is going to be to drive it down at a rate to get us to the cap and to work with Congress on having a good discussion about where we are," the four-star admiral said. "We are seeing positive things."

Navy Secretary Raymond Mabus told the Senate Armed Services Committee last week he hopes to know whether the Navy can meet the cost cap by the fall.

"Whether or not we will be able to meet that goal, I cannot tell you today," he said. "But it is a focus of ours, and we are doing everything that we can in terms of freezing commitments, in terms of competition, in terms of contracting practices to make sure that we do."

Reopening competition for the program could add $60 million to the price of each ship and delay production by another 18 months, Rear Adm. William Landay, the service's program executive officer for ships, warned Congress earlier this year.

Meanwhile, Taylor wants to add language to the bill that will give the Navy the authority to pursue a multiyear contract for the DDG-51 Arleigh Burke class destroyer to drive down the cost of each ship.

The Pentagon has agreed to end production of the DDG-1000 Zumwalt class destroyer after production of the third ship and then restart production on the DDG-51 guided missile destroyers.

Accordingly, its fiscal 2010 budget request includes $2.2 billion to start up the DDG-51 production line again and purchase one of the destroyers. The Navy plans to buy two more DDG-51s in fiscal 2011, but has not finalized a long-term plan for the number of destroyers it wants.

Sean Stackley, Navy assistant secretary for research, development and acquisition, told Taylor's panel last month that he wants to move to a multiyear procurement contract on the DDG-51s in fiscal 2012.

The Navy will restart the program at Northrop Grumman's facility in Pascagoula, Miss., which is in Taylor's district. Eventually, the ships also would be built at General Dynamics' Bath Iron Works shipyard in Maine.

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