Head of House seapower panel endorses Navy LCS plan

A key House Democrat said on Wednesday that he hopes to add language to the fiscal 2010 Defense authorization bill that would help the Navy implement its dramatic restructuring of the troubled Littoral Combat Ship program.

Armed Services Seapower Subcommittee Chairman Gene Taylor, D-Miss., said he wants conferees working on a final authorization bill to sign off on a Navy request to authorize a "block buy" for the next 10 ships -- a contract mechanism that essentially would commit the service to buy a certain number of ships next year, with options for additional purchases in future years.

To rein in the LCS program's escalating costs, the Navy announced plans to restructure the program last week, well after both chambers passed their versions of the annual defense policy measure. Leaders of the House and Senate Armed Services committees hope to wrap up conference negotiations by the end of the month.

Under the Navy's approach, Lockheed Martin Corp. and General Dynamics Corp., which had been under contract to build their designs of the shallow-water combat vessels, would vie for a lucrative deal to build two ships a year between fiscal 2010 and fiscal 2014.

The winning contractor would have an exclusive contract until fiscal 2012, when the Navy would choose another shipyard to build five more ships of the same design by fiscal 2014.

Navy officials hope competition for the initial 10-ship deal will push Lockheed Martin, General Dynamics and their respective shipyard partners to significantly reduce their costs, which have more than doubled since the program's inception less than a decade ago.

A block buy for the next 10 ships would signal the Navy's commitment to the program and give the prime contractor and suppliers added stability, providing a strong incentive to further reduce costs.

It could also serve as a precursor to a multiyear procurement deal, a binding long-term agreement that commits future Congresses to providing the necessary funding. Unlike a block buy, the military must meet a list of requirements, including proof of substantial cost savings, to receive authorization for a multiyear agreement.

"Let's get going on it," Taylor, whose subcommittee met privately on Wednesday with senior Navy acquisition and shipbuilding officials to discuss the LCS plan, said of the block buy.

Congress originally capped each LCS at $220 million, but the program's costs ballooned and lawmakers agreed to increase it to $460 million in the fiscal 2008 defense authorization bill. In the last year, Navy officials signaled they would have difficulty staying within the cost ceiling.

Taylor said he was "inclined to support" the restructure plan and is hopeful it will help get the cost of each ship "as close to $460 million as humanly possible."

The Navy, which wants 55 LCSs in the fleet, hopes to award the contract for the next 10 ships by next March or April.

After fiscal 2014, contractors would continue to compete to build the rest of the combat ships -- a move that Navy officials hope will keep costs down over the life of the program.