Introduction
This report provides background information and issues for Congress on the Navy's Littoral Combat Ship (LCS) program. A total of 32 LCSs have been procured through FY2018. For FY2019, the Navy is requesting the procurement of the 33rd LCS.
The LCS program presents several oversight issues for Congress. Congress's decisions on the program will affect Navy capabilities and funding requirements, and the shipbuilding industrial base.
Starting in FY2020, the Navy wants to shift from procuring LCSs to procuring guided-missile frigates called FFG(X)s whose design may or may not be based on one of the two LCS designs. The FFG(X) program is covered in CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress, by [author name scrubbed].
For an overview of the strategic and budgetary context in which the LCS program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by [author name scrubbed].1
Background
Navy's Force of Small Surface Combatants (SSCs)
SSC Definition
In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, Littoral Combat Ships, mine warfare ships, and patrol craft.2 SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments.
SSC Force-Level Goal
In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 52 SSCs. Although patrol craft are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not considered battle force ships, which are the kind of ships that count toward the quoted size of the Navy and the Navy's force-level goal. 3
SSC Force at End of FY2017
At the end of FY2017, the Navy's force of SSCs totaled 22 battle force ships, including:
- 0 frigates;
- 11 LCSs; and
- 11 mine warfare ships.
Navy Plan for Achieving 52-Ship SSC Force
- The Navy's plan for achieving the 52-ship force-level goal for SSCs is to procure 32 LCSs, with FY2019 being the final year of LCS procurement, and then procure 20 new frigates, called FFG(X)s, with the first FFG(X) to be procured in FY2020. Multiple industry teams are now competing for the FFG(X) program. The design of the FFG(X) is to be based on either an LCS design or a different existing hull design.
- Under the Navy's FY2019 30-year (FY2019-FY2048) shipbuilding plan, the SSC force is to grow from 31 ships in FY2019 to 51 ships in FY2035, reach a peak of 59 ships FY2040, and then decline to 49 ships by FY2048.
LCS Program
Overview
The Navy announced the start of the LCS program on November 1, 2001.4 The LCS is a relatively inexpensive Navy surface combatant that is to be equipped with modular "plug-and-fight" mission packages, including unmanned vehicles (UVs).5 The LCS program has been modified or restructured several times over the years. Current Navy plans call for procuring a total of 32 LCSs and 44 LCS modular mission packages. The first LCS was procured in FY2005, and a total of 32 LCSs have been procured through FY2018.
The LCS's primary missions are antisubmarine warfare (ASW), mine countermeasures (MCM), and surface warfare (SUW) against small boats (including so-called "swarm boats"), particularly in littoral (i.e., near-shore) waters.6 The LCS program includes the development and procurement of ASW, MCM, and SUW modular mission packages. Additional potential missions for LCSs include peacetime engagement and partnership-building operations; intelligence, surveillance, and reconnaissance (ISR) operations; maritime security and intercept operations (including anti-piracy operations); support of Marines or special operations forces; and homeland defense operations. An LCS might perform these missions at any time, regardless of its installed mission package, although an installed mission package might enhance an LCS's ability to perform some of these missions.
The LCS program has been controversial over the years due to past cost growth, design and construction issues with the first LCSs, concerns over the survivability of LCSs (i.e., their ability to withstand battle damage), concerns over whether LCSs are sufficiently armed and would be able to perform their stated missions effectively, and concerns over the development and testing of the modular mission packages for LCSs. Past modifications and restructurings of the LCS program were intended in part to address these issues. The Navy's execution of the program has been a matter of congressional oversight attention for several years.
Annual Procurement Quantities
Table 1 shows past (FY2005-FY2018) and requested (FY2019) annual procurement quantities for LCSs under the Navy's FY2018 budget submission. The Navy wants the LCS requested for procurement in FY2019 to be the final ship in the program.
|
FY05 |
FY06 |
FY07 |
FY08 |
FY09 |
FY10 |
FY11 |
FY12 |
FY13 |
|
1 |
1 |
0 |
0 |
2 |
2 |
2 |
4 |
4 |
|
FY14 |
FY15 |
FY16 |
FY17 |
FY18 |
FY19 |
FY20 |
FY21 |
FY22 |
|
4 |
3 |
3 |
3 |
3 |
1 |
0 |
0 |
0 |
Source: Prepared by CRS based on FY2018 DOD appropriations act and FY2019 Navy budget submission.
Notes: The two ships shown in FY2005 and FY2006 were funded through Navy's research and development account rather than the Navy's shipbuilding account. Figures for FY2006-FY2008 do not include five LCSs (two in FY2006, two in FY2007, and one in FY2008) that were funded in those years but later canceled by the Navy.
Two Designs Built by Two Shipyards
The LCS program includes two very different LCS designs. One was developed by an industry team led by Lockheed; the other was developed by an industry team that was then led by General Dynamics. The design developed by the Lockheed-led team is based on a steel semi-planing monohull (with an aluminum superstructure), while the design developed by the team that was led by GD is based on an all-aluminum trimaran hull (see Figure 1). The two LCS designs also use different built-in combat systems (i.e., different collections of built-in sensors, computers, software, and tactical displays) that were designed by each industry team. The Navy states that both LCS designs meet the Key Performance Parameters (KPPs) for the LCS program.
|
Figure 1. Lockheed Design (Top) and |
 |
|
Source: U.S. Navy file photo accessed by CRS at http://www.navy.mil/list_all.asp?id=57917 on January 6, 2010. |
LCS procurement has been divided evenly between the two designs. The LCS design developed by the Lockheed-led team is built at the Fincantieri/Marinette Marine shipyard at Marinette, WI,7 with Lockheed as the prime contractor; these ships are designated LCS-1, LCS-3, LCS-5, and so on. The design developed by the team that was led by GD is built at the Austal USA shipyard at Mobile, AL, with Austal USA as the prime contractor;8 these ships are designated LCS-2, LCS-4, LCS-6, and so on.
Two Block Buy Contracts for Procuring Ships 5-26
Ships 1 through 4 in the program were procured with single-ship contracts. The next 22 ships in the program (ships 5 through 26) were procured under two 10-ship block buy contracts that the Navy awarded to the two LCS builders in December 2010, and which were later extended in each case to include an 11th ship. The Navy sought and received legislative authority from Congress in 2010 to award these block buy contracts.9
Number in Service
The Navy states that 11 LCSs were in service at the end of FY2017, that 16 will be in service by the end of FY2018, and that 20 will be in service by the end of FY2019.10
Modular Mission Packages
Years ago, when the Navy planned on procuring a total of 52 LCSs, the Navy planned to procure 64 LCS mission packages (16 ASW, 24 MCM, and 24 SUW). As a consequence of reducing the LCS program to a planned total of 32 ships, the planned number of LCS mission packages has now been reduced to 44 (10 ASW, 24 MCM, and 10 SUW).11
LCS mission packages have been under development since the early days of the LCS program. The Navy's plan is to develop and deploy initial versions of these packages, followed by development and procurement of more capable versions. The Navy states that
The LCS MP [mission package] program continues the development of the SUW, MCM, ASW capabilities, delivering individual mission systems incrementally as they become available. This past year LCS 4 deployed with the first installation of an over-the-horizon missile capability added to the SUW MP. The Surface-to-Surface Missile Module with Longbow Hellfire will add more lethality to the SUW MP. It is currently in testing with Initial Operational Capability (IOC) planned for FY 2019.
The ASW MP Escort Mission Module (EMM) uses a continuously active Variable Depth Sonar, integrated with a Multi-Function Towed Array to provide a revolutionary surface ship anti-submarine capability. Development and integration of the EMM, Light Weight Tow, and Torpedo Defense Module are ongoing. The ASW EMM and is on track to fully integrate with the LCS to support IOC with the ASW MP in FY 2019.
The Navy has scheduled three MCM systems for developmental tests (DT) and two for operational assessments (OA) this year, with Milestone C production decisions of the first two expected before the end of FY 2018. The MCM Unmanned Surface Vehicle (USV) is the tow platform for minehunting operations, and is based on the USV already used in the Unmanned Influence Sweep System program. The Navy's plan is to conduct MCM MP DT/OA in FY 2020 and achieve IOC in FY 2021.12
Manning and Deployment
The LCS employs automation to achieve a reduced-sized crew. An LCS with an embarked MCM mission package and an aviation detachment to operate the ship's embarked aircraft might total about 88 sailors, compared to more than 200 for a Navy frigate and more than 300 for a Navy cruiser or destroyer.13
Potential Foreign Sales
Industry has marketed various modified versions of the LCS to potential foreign buyers. Saudi Arabia has purchased four modified LCSs.14
FY2019 Funding Request
The Navy's proposed FY2018 budget requested the procurement of the 30th and 31st LCSs. As part of its action on the Navy's proposed FY2018 budget, Congress procured three LCSs—one more than the two that were requested. Thus, a total of 32 LCSs have been procured through FY2018.
The Navy's proposed FY2019 budget, which was submitted to Congress before Congress finalized action on the Navy's FY2018 budget, requests $646.2 million for the procurement of one LCS. If Congress had procured two LCSs in FY2018, as requested by the Navy, the LCS requested for procurement in FY2019 would have been the 32nd LCS. With the procurement of three LCSs in FY2018, the LCS requested for procurement in FY2019 would be the 33rd LCS.
The Navy's proposed FY2019 budget also requests $103.2 million in so-called "cost-to-complete" procurement funding to cover cost growth on LCSs procured in previous fiscal years, $254.1 million for procurement of LCS mission module equipment, and $70.5 million in procurement funding for LCS in-service modernization.
Issues for Congress for FY2019
Number of LCSs to Procure in FY2019
One issue for Congress for FY2019 is how many LCSs to procure in FY2019. Potential arguments on this issue might be summarized as follows:
- Supporters of procuring no LCSs in FY2019 might argue that the Navy does not have a requirement for a 33rd LCS; that the funding the Navy has requested for a 33rd LCS (and the funding that the Navy might need to request for any additional LCS mission packages for a 33rd LCS) could instead be used to meet other Navy program requirements; and that the backlogs of LCSs procured in previous years will provide substantial amounts of work to the two LCS shipyards as they compete between now and FY2020 for the FFG(X) program.
- Supporters of procuring one LCS in FY2019 might argue that even though the Navy does not have a requirement for a 33rd LCS, the Navy could still make good use of the ship; that a single LCS procured in FY2019, combined with the three LCSs procured in FY2018, make for a total of four ships in FY2018 and FY2019 that could be divided evenly between the two LCS builders, giving them equal amounts of newly added work as they compete for the FFG(X) program; and that funding a 33rd LCS in FY2019 could help accelerate the attainment of the Navy's 52-ship force-level goal for SSCs.
- Supporters of procuring two or more LCSs in FY2019 might argue that even though the Navy does not have a requirement for more than 32 LCSs, the Navy could still make good use of the ships; that it could help accelerate (even more than the previous option could) the attainment of the Navy's 52-ship force-level goal for SSCs; and that maintaining a procurement rate of at least two SSCs per year could help provide a hedge against the possibility of a delay in the start of FFG(X) procurement or in getting the FFG(X) program up to its eventual planned procurement rate of two ships per year.
- Perspectives on the issue of how many LCSs to procure in FY2019 could also be affected by perspectives on issue discussed in the next section.
Navy's Plan for Shifting Procurement from LCS to FFG(X)
Another issue for Congress is whether to approve, reject, or modify the Navy's plan to procure a final LCS in FY2019 and shift to procurement of FFG(X)s starting in FY2020. As noted above, perspectives on this issue could affect perspectives on the previous issue of how many LCSs to procure in FY2019.
As noted earlier, the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020 would achieve the Navy's 52-ship SSC force-level goal by about 2035. The Navy's plan would also have implications for workloads and employment levels at the two LCS shipyards and their supplier firms:
- If a modified LCS is chosen as the winner of the FFG(X) competition, then other things held equal (e.g., without the addition of new work other than building LCSs), workloads and employment levels at the other LCS shipyard (the one whose modified LCS design is not chosen for the FFG(X) program), as well as supplier firms associated with that other LCS shipyard, would decline over time as the other LCS shipyard's backlog of prior-year-funded LCSs is completed and not replaced with new FFG(X) work.
- If a modified LCS is not chosen as the FFG(X)—that is, if the winner of the FFG(X) competition is a proposal based on a hull design other than the two existing LCS designs—then other things held equal, employment levels at both LCS shipyards and their supplier firms would decline over time as their backlogs of prior-year-funded LCSs are completed and not replaced with FFG(X) work.
There are many possible alternatives to the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020. One of these, for example, would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but also produce FFG(X)s at one or both of the LCS yards. Under this option, if the winner of the FFG(X) competition is one of the LCS builders, that builder might build more than half of the FFG(X)s to its winning design, and the other LCS yard would build less than half of the FFG(X)s to its own non-winning (but presumably still-capable) FFG(X) design. Alternatively, if the winner of the FFG(X) competition is neither of the LCS builders, the winning bidder build might build the largest share of the FFG(X)s to its winning design, and the two LCSs yards would each build a smaller number of FFG(X)s to their own non-winning (but presumably still-capable) designs.
Supporters of this option might argue that it could:
- boost FFG(X) production from the currently planned two ships per year to as many as many as four to six ships per year, substantially accelerating the date for attaining the Navy's 52-ship SSC force-level goal;
- permit the Navy to use competition (either competition for quantity at the margin, or competition for profit [i.e., Profit Related to Offers, or PRO, bidding])15 to help restrain FFG(X) prices and ensure production quality and on-time deliveries; and
- complicate adversary defense planning by presenting potential adversaries with multiple FFG(X) designs, each with its own specific operating characteristics.
- Opponents of this plan might argue that it could:
- weaken the FFG(X) competition by offering the winner a smaller prospective number of FFG(X)s and essentially guaranteeing the LCSs yard that they will build some number of FFG(X)s;
- substantially increase annual FFG(X) procurement funding requirements so as to procure as many as four to six FFG(X)s per year rather than two per year, which in a situation of finite DOD funding could require offsetting reductions in other Navy or DOD programs; and
- reduce production economies of scale in the FFG(X) program by dividing FFG(X) among two or three designs, and increase downstream Navy FFG(X) operation and support (O&S) costs by requiring the Navy to maintain two or three FFG(X) logistics support systems.
- Another possible alternative to the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020 would be would be to select a winner in the FFG(X) competition and begin procuring that design in FY2020, as the Navy currently plans, but shift Navy shipbuilding work at one of the LCS yards (if the other wins the FFG(X) competition) or at both of the LCS yards (if neither wins the FFG(X) competition) to the production of sections of larger Navy ships (such as DDG-51 destroyers or amphibious ships) that undergo final assembly at other shipyards. Under this option, in other words, one or both of the LCS yards would be converted into feeder yards supporting the production of larger Navy ships that undergo final assembly at other shipyards. This option might help maintain workloads and employment levels at one or both of the LCS yards, and might alleviate capacity constraints at other shipyards, permitting certain parts of the Navy's 355-ship force-level objective to be achieved sooner.
- The concept of feeder yards in naval shipbuilding was examined at length in a 2011 RAND report.16 The Navy in recent years has made some use of the concept:
- All Virginia-class attack submarines have been produced jointly by General Dynamics' Electric Boat division (GD/EB) and Huntington Ingalls Industries' Newport News Shipbuilding (HII/NNS), with each yard in effect acting as a feeder yard for Virginia-class boats that undergo final assembly at the other yard.17
- Certain components of the Navy's three Zumwalt (DDG-1000) class destroyers were produced by HII's Ingalls Shipyard (HII/Ingalls) and then transported to GD's Bath Iron Works (GD/BIW), the primary builder and final assembly yard for the ships.
- San Antonio (LPD-17) class amphibious ships were built at the Ingalls shipyard at Pascagoula, MS, and the Avondale shipyard near New Orleans, LA. These shipyards were owned by Northrop and later by HII. To alleviate capacity constraints at Ingalls and Avondale caused by damage from Hurricane Katrina in 2005, Northrop subcontracted the construction of portions of LPDs 20 through 24 (i.e., the fourth through eighth ships in the class) to other shipyards on the Gulf Coast and East Coast, including shipyards not owned by Northrop.18
- The above options are only two of many possible alternatives to the Navy's plan to end LCS procurement in FY2019 and shift to FFG(X) procurement starting in FY2020.
Survivability, Lethality, Technical Risk, and Test and Evaluation Issues
A broad oversight area for Congress for the LCS program for the past several years concerns survivability, lethality, technical risk, and test and evaluation issues relating to LCSs and their mission packages. Each year for the past several years, the annual report from DOD's Director, Operational Test and Evaluation (DOT&E) has contained extensive comments, many of them very critical, regarding numerous aspects of LCSs and LCS mission packages. DOT&E's most recent annual report—its January 2018 report for FY2017—once again contains such comments.19 Similarly, over the years, GAO has provided numerous reports and testimony about the LCS program that have raised a variety of issues with the program.20 GAO also provides a summary assessment of risk in the LCS program in an annual report it publishes that surveys selected DOD weapon acquisition programs.21
Legislative Activity for FY2019
Summary of Congressional Action on FY2019 Funding Request
Table 2 summarizes congressional action on the Navy's FY2019 procurement funding request for the LCS program.
Table 2. Congressional Action on FY2019 Procurement Funding Request
Figures in millions, rounded to nearest tenth
|
Request |
Authorization |
Appropriation |
|||||
|
HASC |
SASC |
Conf. |
HAC |
SAC |
Conf. |
||
|
Shipbuilding and Conversion, Navy (SCN) appropriation account |
|||||||
|
Procurement of LCSs |
646.2 |
||||||
|
Cost-to-complete funding for prior-year LCSs |
103.2 |
||||||
|
Other Procurement, Navy (OPN) appropriation account |
|||||||
|
Line 31: LCS common mission modules equipment |
46.7 |
||||||
|
Line 32: LCS MCM mission modules |
124.1 |
||||||
|
Line 33: LCS ASW mission modules |
57.3 |
||||||
|
Line 34: LCS SUW mission modules |
26.0 |
||||||
|
Line 35: LCS in-service modernization |
70.5 |
||||||
Source: Table prepared by CRS based on FY2019 Navy budget submission, committee and conference reports, and explanatory statements on the FY2018 National Defense Authorization Act and the FY2018 DOD Appropriations Act.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee; HAC is House Appropriations Committee; SAC is Senate Appropriations Committee; Conf. is conference agreement.
Legislative Activity for FY2018
Summary of Congressional Action on FY2018 Funding Request
Table 3 summarizes congressional action on the Navy's FY2018 procurement funding request for the LCS program. The amount shown in the requested column of the table reflects the June 29, 2017, Administration budget amendment document that increased the number of LCSs requested for procurement from one to two, and the associated funding request for procurement of LCSs from $636.1 million to $1.136.1 million.
Table 3. Congressional Action on FY2018 Procurement Funding Request
Figures in millions, rounded to nearest tenth
|
Request |
Authorization |
Appropriation |
|||||
|
HASC |
SASC |
Conf. |
HAC |
SAC |
Conf. |
||
|
Shipbuilding and Conversion, Navy (SCN) appropriation account |
|||||||
|
Procurement of LCSs |
1,136.1 |
1,669.1 |
596.1 [subsequently amended in Senate floor action to $1,196.1] |
1,536.1 |
1,567.0 |
1,136.1 |
1,567.0 |
|
Cost-to-complete funding for prior-year LCSs |
26.9 |
26.9 |
26.9 |
26.9 |
26.9 |
26.9 |
26.9 |
|
Other Procurement, Navy (OPN) appropriation account |
|||||||
|
Line 36: LCS common mission modules equipment |
34.7 |
68.7 |
34.7 |
34.7 |
19.4 |
18.8 |
18.8 |
|
Line 37: LCS MCM mission modules |
55.9 |
55.9 |
84.8 |
89.9 |
43.3 |
48.1 |
45.1 |
|
Line 38: LCS ASW mission modules |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Line 39: LCS SUW mission modules |
53.0 |
53.0 |
53.0 |
53.0 |
47.7 |
20.9 |
20.9 |
|
Line 40: LCS in-service modernization |
74.4 |
158.4 |
158.4 |
158.4 |
43.1 |
158.4 |
139.7 |
Source: Table prepared by CRS based on FY2018 Navy budget submission, a June 29, 2017, Administration budget amendment document, committee and conference reports, and explanatory statements on the FY2018 National Defense Authorization Act and the FY2018 DOD Appropriations Act.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee; HAC is House Appropriations Committee; SAC is Senate Appropriations Committee; Conf. is conference agreement.
FY2018 National Defense Authorization Act (H.R. 2810/S. 1519/P.L. 115-91)
House
The House Armed Services Committee, in its report (H.Rept. 115-200 of July 6, 2017) on H.R. 2810, recommended the funding levels for the LCS/Frigate program shown in the HASC column of Table 3. The recommended increase in funding for procurement of LCSs is for a total FY2018 procurement of three LCSs, or one more than the two LCSs requested for procurement in the Navy's amended FY2018 budget submission. The recommended increase of $34 million in procurement funding for LCS common mission modules equipment (line 36) is for mine countermeasures unmanned surface vehicles (MCM USVs). The recommended increase of $84 million for LCS in-service modernization (line 40) is for LCS modernization. (Page 380)
Section 1051(q) of H.R. 2810 as reported strikes subsection (e) of Section 121 of H.R. 2647/P.L. 111-84, the FY2010 National Defense Authorization Act, a subsection that required an annual report on certain aspects of the LCS program.
H.Rept. 115-200 states the following:
Littoral Combat Ships capability enhancements
The committee believes that the Littoral Combat Ship and the Frigate will continue to play a critical role in the mix of warships necessary for Distributed Maritime Operations and believe the Navy should begin Frigate construction as soon as possible. To better expand Frigate capabilities, the committee notes that the Chief of Naval Operations initiated an Independent Review Team to assess Frigate requirements. The committee further notes that the Navy intends to leverage the proposed capabilities of the original Frigate program while adding: increased air warfare capability in both self-defense and escort roles; enhanced survivability; and increased electromagnetic maneuver warfare. The committee supports the Navy's intent to increase the lethality and survivability of the Frigate and further supports backfit options that will provide appropriate enhancements to the existing Littoral Combat Ships. In fiscal year 2019, the committee also believes that additional forward fit options for the fiscal year 2019 Littoral Combat Ships should be pursued. Therefore, the committee directs the Secretary of the Navy to prepare a report to the congressional defense committees by March 1, 2018 that details a transition plan to include forward fit options for the fiscal year 2019 Littoral Combat Ships and backfit options for the existing fleet. Specifically, this report should include an assessment of the following elements: deploying an over-the-horizon weapons system; expanding electronic warfare capabilities to include SEWIP Block II or SEWIP Lite; enhancing survivability attributes; and expanding use of unmanned aerial vehicles or unmanned underwater vehicles. (Page 23)
H.Rept. 115-200 also states the following:
Littoral Combat Ship immersive virtual ship environment
The committee notes that the Littoral Combat Ships (LCS) training and certification capability is a key enabler of the reduced crew size. The Navy indicated that the LCS training is based on a virtual ship-centric concept, accomplished through a combination of classroom instruction, vendor training, shore-based trainers, and sophisticated virtual reality training systems. The committee notes that the original LCS training design relied upon using an immersive, virtual ship environment (IVSE) to replicate key training objectives and protocols for both ship variants. The committee continues to support efforts to fully employ such sophisticated training, particularly live-virtual-constructive training, for the LCS fleet with the objective of improving sailor performance through higher-fidelity, effective training solutions.
Despite the broad acknowledgement of the value of this approach to training, positive fleet feedback from the first immersive course, and the existence of a contract vehicle to support courseware development, the committee believes the Navy has been slow to leverage this capability to address readiness. The committee is concerned about the Navy's commitment to addressing the LCS training environment. In light of ongoing LCS operations and maintenance challenges, the committee encourages the Navy to more fully utilize IVSE courseware. (Page 59)
Senate Committee Report
The Senate Armed Services Committee, in its report (S.Rept. 115-125 of July 10, 2017) on S. 1519, recommended the funding levels for the LCS/Frigate program shown in the SASC column of Table 3. The report recommends the procurement of one LCS (the originally requested number, prior to the Administration's budget amendment), and recommends reducing the funding for procuring that one ship by $40 million for "unit price adjustment." (Page 402) The recommended net increase of $28.9 million for LCS mission modules (line 37) includes an increase of $34 million for "UFR: Additional MCM USV" (meaning an unfunded requirement for additional mine countermeasures unmanned surface vehicles) and a reduction of $5.1 million for "procurement ahead of need." (Pages 404-405) The recommended increase of $84 million for LCS in-service modernization (line 40) is for "UFR: LCS modernization for increased lethality." (Page 405)
Section 1017 of S. 1519 as reported states the following:
SEC. 1017. Operational readiness of Littoral Combat Ships on extended deployment.
(a) In general.—Subsection (a) of section 7310 of title 10, United States Code, is amended—
(1) by inserting "Under jurisdiction of the Secretary of the Navy" in the subsection heading after "Vessels";
(2) by striking "A naval vessel (or any other vessel under the jurisdiction of the Secretary of the Navy)" and inserting "(1) Except as provided in paragraph (2), a naval vessel"; and
(3) by adding at the end the following new paragraph:
"(2) (A) Subject to subparagraph (B), in the case of a naval vessel classified as a Littoral Combat Ship and operating on deployment, corrective and preventive maintenance or repair (whether intermediate or depot level) and facilities maintenance may be performed on the vessel—
"(i) in a foreign shipyard;
"(ii) at a facility outside of a foreign shipyard; or
"(iii) at any other facility convenient to the vessel.
"(B) (i) Corrective and preventive maintenance or repair may be performed on a vessel as described in subparagraph (A) if the work is performed by United States Government personnel or United States contractor personnel.
"(ii) Facilities maintenance may be performed by a foreign contractor on a vessel as described in subparagraph (A) only as approved by the Secretary of the Navy.".
(b) Definitions.—Such section is further amended by adding at the end the following new subsection:
"(d) Definitions.—In this section:
"(1) The term 'corrective and preventive maintenance or repair' means—
"(A) maintenance or repair actions performed as a result of a failure in order to return or restore equipment to acceptable performance levels; and
"(B) scheduled maintenance or repair actions to prevent or discover functional failures.
"(2) The term 'facilities maintenance' means preservation or corrosion control efforts and cleaning services.".
(c) Clerical amendments.—
(1) SECTION HEADING.—The heading of such section is amended to read as follows:
"§ 7310. Overhaul, repair, and maintenance of vessels in foreign shipyards and facilities: restrictions; exceptions".
(2) TABLE OF SECTIONS.—The table of sections at the beginning of chapter 633 of such title is amended by striking the item relating to section 7310 and inserting the following new item:
"7310. Overhaul, repair, and maintenance of vessels in foreign shipyards and facilities: restrictions; exceptions.".
Regarding Section 1017, S.Rept. 115-125 states the following:
Operational readiness of Littoral Combat Ships on extended deployment (sec. 1017)
The committee recommends a provision that would amend title 10, United States Code and provide the Secretary of the Navy with additional flexibility to maintain Littoral Combat Ships (LCS) by allowing government or contractor personnel to conduct maintenance on LCS vessels operating on deployment regardless of ship locations.
This provision would codify the authorities successfully employed in a pilot program authorized by section 1025 of the Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 (Public Law 113–291).
The pilot program was conducted to evaluate maintenance options for LCS vessels on extended deployments from December 2014 to September 2016. The Navy's assessment of the pilot program, which was submitted in a March 2017 report to Congress found, "Based on the pilot program results, cost savings are expected to be notable. Even more importantly, the flexibility to provide timely maintenance in support of schedule changes and mission execution is crucial to long-term success of the LCS Fleet . . ."
The committee concurs with the Navy's assessment of the pilot program and recommends codifying the associated authorities in title 10, United States Code. (Page 227)
S.Rept. 115-125 states the following:
Littoral Combat Ship
The [original, unamended] budget request included $636.1 million in line item 11 of Shipbuilding and Conversion, Navy (SCN), for procurement of one Littoral Combat Ship.
The committee notes unjustified unit cost growth in the other cost ($37.0 million) and other electronics ($3.0 million) categories.
Therefore, the committee recommends a decrease of $40.0 million for this program. (Page 17)
S.Rept. 115-125 states the following:
LCS support equipment
The budget request included $48.0 million in line item 17 of Other Procurement, Navy (OPN), for Littoral Combat Ship (LCS) support equipment.
The committee notes this request includes procurement of two MT–30 engines, one Freedom variant main propulsion diesel engine (MPDE), and one Independence variant MPDE to serve as battle spares.
The committee further notes the Navy has previously procured three MT–30s, two Freedom variant MPDEs, and two Independence variant MPDEs in this line item. The committee also notes the P-5a and P-21 budget exhibits were omitted, which detail procurement history and production schedules, and requests these exhibits be restored in the fiscal year 2019 budget request.
Therefore, the committee recommends a decrease of $42.6 million for this program due to procurement early to need.
LCS mine countermeasures mission modules
The budget request included $55.9 million in line item 37 of Other Procurement, Navy (OPN), for Littoral Combat Ship (LCS) mine countermeasures (MCM) mission modules.
The committee notes this request included procurement of two Airborne Mine Neutralization Systems (AMNS). The committee further notes that the initial operational capability of the MCM mission module is planned for fiscal year 2021 and believes at least one AMNS is early to need.
Therefore, the committee recommends a decrease of $5.1 million for this program. (Pages 18-19)
S.Rept. 115-125 also states the following:
Littoral Combat Ship
The budget request contained $41.0 million in PE 63581N [in the Navy's research and development account] for Littoral Combat Ships. [Note: This line item is not shown in Table 3.]
The committee notes the Littoral Combat Ship project (3096) included no product development and a reduced level of test and evaluation activity.
Therefore, the committee recommends a reduction of $7.0 million, for a total of $34.0 million, to align support costs with program activity. (Page 60)
Senate Floor Action
On September 18, 2017, as part of its consideration of H.R. 2810, the Senate agreed by unanimous consent to S.Amdt. 1086, increasing LCS procurement funding by $600 million, offset by a $600 million increase to a DOD budget line item relating to fuel savings.
Conference
The conference report (H.Rept. 115-404 of November 9, 2017) on H.R. 2810/P.L. 115-91 of December 12, 2018, recommended the funding levels for the LCS/Frigate program shown in the authorization conference column of Table 3. The recommended funding for procurement of LCSs is for a total procurement of three ships (one more than the amended request). The recommended increase of $34 million for LCS MCM mission modules (line 37) is for an unfunded requirement for two additional MCM unmanned surface vehicles (USVs). The recommended increase of $84 million for LCS in-service modernization (line 40) is for LCS modernization. (Page 1139)
Section 1023 of the conference version of H.R. 2810 states:
SEC. 1023. Operational readiness of littoral combat ships on extended deployment.
Section 7310(a) of title 10, United States Code, is amended—
(1) by inserting "Under jurisdiction of the Secretary of the Navy" in the subsection heading after "Vessels";
(2) by striking "A naval vessel (or any other vessel under the jurisdiction of the Secretary of the Navy)" and inserting "(1) A naval vessel"; and
(3) by adding at the end the following new paragraph:
"(2) (A) Notwithstanding paragraph (1) and subject to subparagraph (B), in the case of a naval vessel classified as a Littoral Combat Ship and operating on deployment, corrective and preventive maintenance or repair (whether intermediate or depot level) and facilities maintenance may be performed on the vessel—
"(i) in a foreign shipyard;
"(ii) at a facility outside of a foreign shipyard; or
"(iii) at any other facility convenient to the vessel.
"(B) (i) Corrective and preventive maintenance or repair may be performed on a vessel as described in subparagraph (A) if the work is performed by United States Government personnel or United States contractor personnel.
"(ii) Facilities maintenance may be performed by a foreign contractor on a vessel as described in subparagraph (A) only as approved by the Secretary of the Navy.
"(C) In this paragraph:
"(i) The term 'corrective and preventive maintenance or repair' means—
"(I) maintenance or repair actions performed as a result of a failure in order to return or restore equipment to acceptable performance levels; and
"(II) scheduled maintenance or repair actions to prevent or discover functional failures.
"(ii) The term 'facilities maintenance' means preservation or corrosion control efforts and cleaning services.
"(D) This paragraph shall expire on September 30, 2020.".
Regarding Section 1023, H.Rept. 115-404 states:
Operational readiness of littoral combat ships on extended deployment (sec. 1023)
The Senate amendment contained a provision (sec. 1017) that would amend title 10, United States Code, to provide the Secretary of the Navy with additional flexibility to maintain Littoral Combat Ships operating on deployments.
The House bill contained no similar provision.
The House recedes with an amendment that would sunset the new authorities provided by the Senate provision on September 30, 2020.
The conferees direct the Secretary of the Navy to submit to the congressional defense committees a report not later than the first day of February of 2019, 2020, and 2021 on the readiness of Littoral Combat Ships (LCSs) operating under the authorities provided by this section. This report shall include each of the following for the previous fiscal year:
(1) Lessons learned regarding sustainment of LCSs while operating on deployments, including the extent to which shipboard personnel were involved in performing maintenance;
(2) The sustainment strategy, including maintenance requirements, methods, and costs, utilized to support LCSs while operating on deployments;
(3) Observations and recommendations regarding these authorities, including modifications that would improve the readiness of LCSs operating on deployments;
(4) The effect of these authorities on material readiness and operational availability;
(5) The extent to which overseas maintenance periodicities were accomplished in the scheduled or allotted timeframes;
(6) The total cost to sustain LCSs operating on deployments, including all costs for the performance of corrective and preventative maintenance, and all facilitation costs, both ashore and shipboard;
(7) A detailed comparison of costs, including the cost of labor, between maintenance support provided in the United States and any savings achieved by performing facilities maintenance in foreign shipyards;
(8) A description of the permanent facilities required to support LCSs while operating on deployments from overseas locations; and
(9) A recommendation to either maintain or eliminate the sunset of these authorities, which would take effect on September 30, 2020.
The conferees also direct the Secretary of the Navy to submit to the congressional defense committees a report not later than 180 days after the date of enactment of this Act, which includes for the period of fiscal years 2018 through 2023: (1) a comprehensive Littoral Combat Ship maintenance plan, by level of maintenance (e.g., depot, intermediate and unit-level) and the implementation schedule for each LCS; and (2) the schedule of LCS inspections that complies with section 7304 of title 10, United States Code (i.e. Board of Inspection and Survey plan for LCSs). (Pages 916-917)
Section 1051(o) of H.R. 2810 repeals Section 121(e) of the FY2010 National Defense Authorization Act (H.R. 2647/P.L. 111-84 of October 28, 2009), which required an annual report on certain cost-related aspects of the LCS program.
FY2018 DOD Appropriations Act (Division A of H.R. 3219/S. XXXX/Division C of H.R. 1625/P.L. 115-141)
House
H.R. 3219 as reported by the House Appropriations Committee (H.Rept. 115-219 of July 13, 2017) was the FY2018 DOD Appropriations Act. H.R. 3219 as passed by the House is called the Make America Secure Appropriations Act, 2018. H.R. 3219 as passed by the House includes the FY2018 DOD Appropriations Act as Division A and four other appropriations acts as Divisions B through E. The discussion below relates to Division A.
The House Appropriations Committee, in its report (H.Rept. 115-219 of July 13, 2017) on H.R. 3219, recommended the funding levels for the LCS/Frigate program shown in the HAC column of Table 3. The recommended funding for procurement of LCSs is for a total procurement of three ships (one more than the amended request). The net increase in funding shown reflects additional funding needed for a three-ship procurement, as well as a reduction of $19.2 million for "Plans cost growth." (Page 161) Recommended changes in funding for OPN lines 36-40 are as follows:
- the recommended reduction of $15.3 million for LCS common mission modules equipment (line 36) is for "Mission bay training devices early to need";
- the recommended reduction of $12.546 million for LCS MCM mission modules (line 37) is for "ALMDS [airborne laser mine detection system] unit cost growth" ($4.120 million), "COBRA [Coastal Battlefield Reconnaissance and Analysis] previously funded" ($0.922 million), and "MCM support equipment excess to need" ($7.504 million);
- the recommended reduction of $5.3 million for LCS SUW mission modules (line 39) is for "Insufficient budget justification"; and
- the recommended reduction of $31.304 million for LCS in-service modernization (line 40) is for "Habitability modifications early to need" ($25.504 million) and "Design changes early to need" ($6.8 million).
Senate
On November 21, 2017, the Senate Appropriations Committee released a chairman's recommendation and explanatory statement for the FY2018 DOD Appropriations Act, referred to here as S. XXXX. The explanatory statement recommended the funding levels shown in the SAC column of Table 3. Recommended changes in funding for OPN lines 36-40 are as follows:
- the recommended reduction of $15.9 million for LCS common mission modules equipment (line 36) is for "Restoring acquisition accountability: Mission package training equipment early to need";
- the recommended reduction of $7.8 million for LCS MCM mission modules (line 37) is for "Restoring acquisition accountability: MCM support equipment and production engineering excess to need";
- the recommended reduction of $32.0 million for LCS SUW mission modules (line 39) is for "Restoring acquisition accountability: Surface-to-surface mission module early to need" ($11.6 million) and "Restoring acquisition accountability: Excess gun module and maritime security module ahead of mission package acquisition strategy" ($20.4 million); and
- the recommended increase of $84 million for LCS in-service modernization is for "Program increase: LCS mod for increased lethality and survivability upgrades for 4 ships." (Page 115)
Conference
The FY2018 DOD Appropriations Act was enacted as Division C of H.R. 1625/P.L. 115-141 of March 23, 2018, the Consolidated Appropriations Act, 2018. The explanatory statement for Division C of H.R. 1625 provides the funding levels for the LCS program shown in the appropriation conference column of Table 3. The recommended funding for procurement of LCSs is for a total procurement of three ships (one more than the amended request). The net increase in funding reflects $450.1 million in additional funding needed for a three-ship procurement, as well as a reduction of $19.2 million for "Plans cost growth." (pdf page 168 of 391) Recommended changes in funding for OPN lines 36-40 are as follows:
- the reduction of $15.9 million for LCS common mission modules equipment (line 36) is for "Mission package training equipment early to need";
- the reduction of $10.7 million for LCS MCM mission modules (line 37) is for "ALMDS [airborne laser mine detection system] unit cost growth" ($2.0 million), "COBRA [Coastal Battlefield Reconnaissance and Analysis] previously funded" ($0.922 million), and "MCM support equipment excess to need" ($7.802 million);
- the reduction of $32.0 million for LCS SUW mission modules (line 39) is for "Surface-to-surface mission module early to need," ($11.6 million) and "Excess gun module and maritime security module ahead of mission package acquisition strategy," ($20.4 million);
- the net increase of $65.3 million for LCS in-service modernization (line 40) includes an increase of $84.0 million for "Program increase—LCS mod [modification] for increased lethality and survivability upgrades for four ships, a reduction of $14.7 million for "Habitability modifications early to need," and a reduction of $4.0 million for "Design changes early to need" (pdf page 178 of 391).
Appendix. Defense-Acquisition Policy Lessons
In reviewing the LCS program, one possible question concerns what defense-acquisition policy lessons, if any, the program may offer to policymakers, particularly in terms of the rapid acquisition strategy that the Navy pursued for the LCS program, which aimed at reducing acquisition cycle time (i.e., the amount of time between starting the program and getting the first ship into service).
One possible perspective is that the LCS program demonstrated that reducing acquisition cycle time can be done. Supporters of this perspective might argue that under a traditional Navy ship acquisition approach, the Navy might have spent five or six years developing a design for a new frigate or corvette, and perhaps another five years building the lead ship, for a total acquisition cycle time of perhaps 10 to 11 years. For a program announced in November 2001, this would have resulted in the first ship entering service in between late 2011 and late 2012. In contrast, supporters of this perspective might argue, LCS-1 entered service on November 8, 2008, about seven years after the program was announced, and LCS-2 entered service on January 16, 2010, a little more than eight years after the program announced. Supporters of this perspective might argue that this reduction in acquisition cycle time was accomplished even though the LCS incorporates major innovations compared to previous larger Navy surface combatants in terms of reduced crew size, "plug-and fight" mission package modularity, high-speed propulsion, and (in the case of LCS-2) hull form and hull materials.
Another possible perspective is that the LCS program demonstrated the risks or consequences of attempting to reduce acquisition cycle time. Supporters of this perspective might argue that the program's rapid acquisition strategy resulted in design-construction concurrency (i.e., building the lead ships before their designs were fully developed), a practice long known to increase risks in defense acquisition programs. Supporters of this perspective might argue that the cost growth, design issues, and construction-quality issues experienced by the first LCSs were due in substantial part to design-construction concurrency, and that these problems embarrassed the Navy and reduced the Navy's credibility in defending other acquisition programs. They might argue that the challenges the Navy faces today in terms of developing an LCS concept of operations (CONOPS),22 LCS manning and training policies, and LCS maintenance and logistics plans were increased by the rapid acquisition strategy, because these matters were partly deferred to later years (i.e., to today) while the Navy moved to put LCSs into production. Supporters of this perspective might argue that the costs of the rapid acquisition strategy are not offset by very much in terms of a true reduction in acquisition cycle time, because the first LCS to be equipped with a mission package that had reached IOC (initial operational capability) did not occur until late FY2014—almost 13 years after the LCS program was announced. Supporters of this perspective could argue that the Navy could have avoided many of the program's early problems and current challenges—and could have had a fully equipped first ship enter service in 2011 or 2012—if it had instead pursued a traditional acquisition approach for a new frigate or corvette. They could argue that the LCS program validated, for defense acquisition, the guideline from the world of business management that if an effort aims at obtaining something fast, cheap, and good, it will succeed in getting no more than two of these things,23 or, more simply, that the LCS program validated the general saying that haste makes waste.
A third possible perspective is that the LCS program offers few if any defense-acquisition policy lessons because the LCS differs so much from other Navy ships and the Navy (and DOD generally) consequently is unlikely to attempt a program like the LCS in the future. Supporters of this perspective might argue that the risks of design-construction concurrency have long been known, and that the experience of the LCS program did not provide a new lesson in this regard so much as a reminder of an old one. They might argue that the cost growth and construction delays experienced by LCS-1 were caused not simply by the program's rapid acquisition strategy, but by a variety of factors, including an incorrectly made reduction gear24 from a supplier firm that forced the shipbuilder to build the lead ship in a significantly revised and suboptimal construction sequence.