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September 16, 2009

LCS down select set for FY 2010

The Navy announced today it will down select between the two Littoral Combat Ship (LCS) designs in fiscal 2010. The current LCS seaframe construction solicitation will be cancelled and a new solicitation will be issued. At down select, a single prime contractor and shipyard will be awarded a fixed price incentive contract for up to 10 ships with two ships in fiscal 2010 and options through fiscal 2014. This decision was reached after careful review of the fiscal 2010 industry bids, consideration of total program costs, and ongoing discussions with Congress.

There are two different LCS hull forms: a semi-planing monohull and an aluminum trimaran. The seaframes are designed and built by two industry teams led by Lockheed Martin and General Dynamics.

The Lockheed Martin design is being built at Fincantieri Marine Group's Marinette Marine and the GD design at Austal USA.

Of the planned 55-ship program, the Marinette-built LCS 1 is commissioned, the Austal-built LCS 2 is undergoing sea trials, and construction has started for LCS 3 at Marinette and LCS 4 at Austal.

Delivery of LCS 2, along with construction of LCS 3 and LCS 4 will not be affected by the decision announced today.

"This change to increase competition is required so we can build the LCS at an affordable price," said Ray Mabus, Secretary of the Navy. "LCS is vital to our Navy's future. It must succeed."

"Both ships meet our operational requirements and we need LCS now to meet the warfighters' needs," said Adm. Gary Roughead, chief of naval operations. "Down selecting now will improve affordability and will allow us to build LCS at a realistic cost and not compromise critical warfighting capabilities."

The Navy cancelled the solicitation to procure up to three LCS Flight 0+ ships in fiscal 2010 due to affordability. It says that based on proposals received this summer, it was not possible to execute the LCS program under the current acquisition strategy and given the expectation of constrained budgets. The new LCS acquisition strategy improves affordability by competitively awarding a larger number of ships across several years to one source. The Navy will accomplish this goal by issuing a new fixed price incentive solicitation for a down select to one of the two designs, beginning in fiscal 2010.

Both industry teams will have the opportunity to submit proposals for the fiscal 2010 ships under the new solicitation.

The selected industry team will deliver a quality technical data package, allowing the Navy to open competition for a second source for the selected design beginning in fiscal 2012. The winner of the down select will be awarded a contract for up to 10 ships from fiscal 2010 through fiscal 2014, and also provide combat systems for up to five additional ships provided by a second source.

The Pentagon says that this plan ensures the best value for the Navy, continues to fill critical warfighting gaps, reduces program ownership costs, and meets the spirit and intent of the Weapons System Acquisition Reform Act of 2009.

The Navy says it remains committed to the LCS program and the requirement for 55 of these ships to provide combatant commanders with the capability to defeat anti-access threats in the littorals, including fast surface craft, quiet submarines and various types of mines. The Navy's acquisition strategy will be guided by cost and performance of the respective designs as well as options for sustaining competition throughout the life of the program.

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