Post by ferryfast admin on Dec 3, 2007 15:11:05 GMT -5
New Lockheed, General Dynamics Warships Delayed (Update1)
By Tony Capaccio
Nov. 28 (Bloomberg) -- The U.S. military plans to delay its purchase of 11 warships now under development by Lockheed Martin Corp. and General Dynamics Corp.
The Navy planned to buy 32 of the new Littoral Combat Ships over the next five years and now will buy only 21, according to an unpublished Nov. 19 directive from Deputy Defense Secretary Gordon England that spells out changes in the Pentagon's fiscal 2009-2013 plan. The savings from buying the vessels after 2013 could be as much as $5 billion, an analyst said.
The delay is the latest indication of disarray in the Navy's plan to develop and field the new class of low-cost vessels designed to operate close to shore. The Navy already canceled two of four vessels on contract with Lockheed and General Dynamics.
General Dynamics, the Navy's second-largest shipbuilder, and Lockheed, the world's biggest defense company by sales, are building competing versions of the new ship. Costs for developing the vessel have increased as much as 70 percent, Navy officials have said.
``If the Navy doesn't keep this program on track, it will never get to its goal'' of building the U.S. fleet to 313 vessels from 280 today, said Loren Thompson, a defense analyst with the Lexington Institute in Arlington, Virginia.
The Littoral Ship program has been ``burdened by big cost overruns and a controversial acquisition strategy'' that included use of shipyards that have no history of building warships, accelerated development and ``bypassing the Navy shipbuilding bureaucracy,'' Thompson said.
Persian Gulf, Korea
England's ``Program Decision Memorandum'' tells the services what to put in their budgets that will be part of the overall fiscal 2009 budget that President George W. Bush will send to Congress in February.
The Littoral Combat Ship is designed to have a draft of no more than 20 feet and be able to operate close to coastlines such as those in the Persian Gulf and Korean peninsula, with missions ranging from mine sweeping and submarine hunting to humanitarian relief.
Navy Secretary Donald Winter proposed delaying the program in late August because of the cost overruns and schedule slips. England's memo does not say how money would be saved, but the Navy has told Congress that the vessels could cost as much as $460 million apiece, more than double the initial estimate of $220 million.
Ronald O'Rourke, the naval analyst with the nonpartisan Congressional Research Service, estimated England's decision will allow the Navy to shift as much as $5 billion into other programs.
Annual Cuts
England, in his memo, directs the Navy to seek funding for two Littoral Ships in 2009 instead of the six planned, three in 2010 and 2011 instead of six each year and four instead of six in 2012. He directed the Navy to add one ship in 2013, raising the number that year to six.
England spokesman Kevin Wensing had no immediate comment on the Littoral Ship decision. Navy spokesman Lieutenant Commander John Schofield said the program is under review and any comment now would be ``speculative and pre-decisional.''
Craig Quigley, spokesman for Bethesda, Maryland-based Lockheed, said the company ``has not been notified of such a decision, nor would it be appropriate for that to occur at this stage of the budget process.''
Kendell Pease, spokesman for Falls Church, Virginia-based General Dynamics, said, ``It would be inappropriate to comment on the president's budget until it is released in February.''
Submarine, Destroyer Programs
England approved adding a total of $2 billion in fiscal years 2009 through 2011 to allow the purchase in 2011 of two Northrop Grumman Corp. Virginia class submarines instead of just one, according to the document.
England approved adding $693 million through 2013 for the new Zumwalt class DDG-1000 destroyer to be built by Northrop and General Dynamics, bringing funding for its development to about $9.29 billion, the Navy's highest projected cost.
Lockheed Martin's Maritime Systems & Sensors unit of Moorestown, New Jersey, is managing its overall Littoral Ship design and construction that consists of designer Gibbs & Cox Inc., Marinette Marine of Marinette, Wisconsin, and Bollinger Shipyards of Lockport, Louisiana.
The General Dynamics design is based on one from Australia- based Austal Ltd. General Dynamics is supervising construction of the first ship at an Austal shipyard in Mobile, Alabama.
To contact the reporter on this story: Tony Capaccio at acapaccio@bloomberg.net
Last Updated: November 28, 2007 13:57 EST