Post by ferryfast admin on Feb 8, 2008 23:24:53 GMT -5
Costs for Austal LCS climb
Navy wants three more ships, but won't say who will build them
Thursday, February 07, 2008
By SEAN REILLY
Washington Bureau
www.al.com/
WASHINGTON -- The Navy wants to buy three new littoral combat ships by late next year under a draft spending plan that also shows the estimated price tag of a first-of-a-kind version under construction by Austal USA in Mobile has sailed past the half-billion dollar mark.
Now about 65 percent complete, the close-to-shore ship being built at Austal is called the Independence. It is one of two vessels already under construction. The other is being built by a group headed by Maryland-based Lockheed Martin Corp.
The three ships included in the draft spending plan would be in addition to the two vessels already being built. The government has not decided who will construct the additional three ships.
The LCS now being constructed at Austal carries a "total end cost" of $507 million, according to a Navy forecast released this week in connection with President Bush's proposed budget for the 2009 fiscal year that begins in October. Austal is building the ship as part of a team led by Virginia-based General Dynamics Corp.
That $507 million figure represents only the tab for the seaframe, which was originally supposed to cost about $220 million, said Ronald O'Rourke, a national defense specialist with the nonpartisan Congressional Research Service.
Once outfitting and other expenses are factored in, the projected price tag for the Independence climbs to $636 million, according to the Navy. That number does not include "packages" for anti-submarine measures and other missions, O'Rourke said.
The numbers are far higher than what top Navy officials had previously acknowledged up until late last year. As recently as November, for example, they were saying the cost of the Independence's seaframe was 50 percent to 75 percent above the original estimate, putting the upper limit at about $390 million.
Asked Tuesday when the new forecasts were developed, a Navy spokeswoman was unable to provide an answer by Wednesday evening. A Press-Register request to interview Navy budget officials was denied.
Bill Pfister, Austal's vice president of government programs, said Tuesday that the Navy's numbers "are very high," but would not release his team's estimate. General Dynamics spokesman Jim DeMartini also declined to supply figures. Both cited proprietary concerns.
The military ultimately wants to build 55 of the small fast ships, designed to operate in shallow coastal waters. As General Dynamics and Austal work on their prototype, the rival Lockheed group has also been beset by cost overruns on its version, which is under construction in Wisconsin.
Originally, the Navy had planned to select one of the two designs as the basis for future orders. That strategy collapsed last year as the government canceled the second ship that each team was supposed to build when it could not reach cost-control deals with the companies.
Under the budget released this week, the Navy now tentatively plans to award a contract for a third LCS this August with two more buys next year via a competition limited to General Dynamics and Lockheed because only they have the knowledge needed "to efficiently and effectively construct these additional follow-on ships," according to a government notice last week.
As was not true for the first two ships, these new contracts would carry a fixed price with an incentive for good performance and a general cost cap of $460 million each.
"The devil will be in the details," DeMartini said.
Austal's Mobile-area operation employs about 1,145 people and is proceeding with a major expansion.
The end cost of the seaframe for the first Lockheed ship, known as the "Freedom," is also in the half-billion dollar range, according to the newly released budget numbers.
In an interim review first reported by the publication "Inside the Pentagon," the Naval Audit Service recently faulted Navy managers for their oversight of the Lockheed program.