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Navy moves to bring Littoral Combat Ship costs under control

The Navy announced plans Thursday to get its new generation of speedy and maneuverable warships back on track in the face of cost overruns that led to a stop-work order on one of the warships being built by Lockheed Martin Corp.

Navy Secretary Donald Winter, who proposed lifting the stop-work order, announced a restructuring of the Littoral Combat Ship program to improve management oversight and implement stricter cost controls at a meeting in Washington.

Two competing versions of the warships are being built.

Lockheed Martin’s LCS-1 is being built at Wisconsin’s Marinette Marine Corp., while General Dynamic’s LCS-2 is being built at Alabama’s Austal USA shipyard in Mobile.

“It is vital that the Navy continue through first-of-class construction challenges to complete LCS-1 and LCS-2. When these ships are delivered, we will be able to fully evaluate their costs and capabilities,” Winter said in a statement.

The Navy imposed a stop-work order on Lockheed Martin’s second ship that’s under construction at Bollinger Shipyards Inc. in Lockport, La., because of cost overruns on the first ship that Winter placed on the order of 50 percent to 75 percent over the contracted price of $270 million.

Work on Lockheed Martin’s second ship will resume if it agrees to a fixed-price incentive contract, Winter said. The company has until April 12 to decide.

So far, the General Dynamics version of the ship at the Alabama shipyard has not been hit with the same scale of cost overruns. Bath Iron Works, a General Dynamics subsidiary in Bath, Maine, is lead contractor on that project.

The Littoral Combat Ship has been fast-tracked because the Navy wants a smaller ship that can operate in coastal, or littoral, waters.

Lockheed Martin’s version resembles a traditional frigate or destroyer but features a sleek, semi-planing hull, while General Dynamic’s version is an all-aluminum three-hulled vessel. Both are powered by steerable waterjets and can reach about 50 mph.

The Navy envisions them meeting threats including modern-day pirates and terrorists who turn speedboats into suicide weapons, as well conducting mine removal and anti-submarine missions.

The Navy made it clear it won’t let costs balloon out of control.

“It is imperative that the Navy deliver this warship class and its important capabilities to the fleet as soon as possible. It is just as imperative that we do so in the most cost-effective manner possible,” Adm. Mike Mullen, chief of naval operations, said in a statement.

In the end, the Navy could choose the Lockheed Martin or the General Dynamics design, or it could choose to build both designs. The Navy wants to build 55 of the ships, which are a big part of the Navy’s overall goal of a 313-ship fleet.