ccording to official Pentagon documents, the Navy's FY 2006 budget for the LCS program was $1.054 billion ($470.3M procurement, $584.1M RDT&E), which dropped to $926.6 million in FY 2007 budget ($597.2M procurement of ships & mission modules, $329.4M RDT&E). The FY 2008 request is set at $1.208 billion ($990.8M for 3 ships + 2 mission modules, $217.5M RDT&E); but the Navy's revised LCS procurement strategy may cause shifts in that allocation, even in the unlikely event that all funding survives.
The program is structured for Team Lockheed and the General Dynamics/Austal consortium to each produce a number of fully operational, competing Flight Zero ships; construction of the first 2 ships from each team is now underway. The idea is that experience with these ships is the best teacher and evaluator, ensuring that the Navy selects the right winning team for the overall program. Meanwhile, it will still be able to use all of the Flight 0 ships during the testing phase and beyond.
The design approach for the winning team's second generation Flight 1 LCS ships is flexible, and was envisioned as changing somewhat in order to incorporate the experience gained in the Flight 0 designs. While the number of LCS ships is not finalized, there has been speculation of 50-60 LCS ships within a total US naval fleet of 315 ships. This would put the overall program value at around $24 billion, based on the original price tag of about $400 million total for each ship ($220 million) + 3 mission modules (3x $60 million).
Initially, 4 Flight 0 ships and 9 Flight 1 ships were contemplated, along with 7 mission modules which would include 3 mine warfare modules and 2 anti-submarine modules (ASW) components. Austal's December 11, 2006 press release even implied that more early-build ships might enter US Navy plans:
"Recent Navy reports have speculated on an expanded acquisition strategy, from 4 to a possible 17, for the Flight 0 fleet of LCSs that also includes an alternate monohull ship design. Commenting in September, Assistant Secretary of the Navy (Research, Development, and Acquisition), Dr Delores Etter, told Reuters, 'The U.S. Navy hopes to finalize its acquisition strategy for a new class of shore-hugging combat ships by mid-December .' "
As the program progressed, however, per-ship cost growth due to new Navy standards compliance requirements and other shifts has forced significant changes in the Navy's acquisition strategy. Under the new approach, planned FY 2007 procurements would be channeled into getting LCS 1-4 built, rather than buying additional ships as some in Congress proposed. Instead of buying 3 LCS ships in 2008, and then ramp up to building 6 ships per year beginning in 2009 through 2012, amended procurement plans would buy 2 LCS ships in 2008, and 3 in 2009. Congressional votes, which are becoming less supportive of the LCS program as its costs rise, could trim that number further.
Furthermore, the revised LCS program would select one final design by 2010 – with a design competition that would be separate from the build competition, meaning that the ship's design team may not be the final builders. Of course, handing a ship design to a firm that hasn't built it before carries cost-inflation risks of its own. The question is whether the potential threat of doing so creates enough added incentives to keep costs down to justify the increased time and overhead of 2 serial competitions.
As noted earlier, there are currently two different LCS designs being produced and procured as part of the competition. The General Dynamics team is offering a futuristic but practical high-speed trimaran, based on Austal designs and experience with vessels like the US Marines' Westpac Express high-speed transport and the Army and Navy's TSV/HSV ships. It offers an especially large landing area and internal volume for its size, and has the potential for improved survivability against hits to its sides thanks to the trimaran design. Team Lockheed Martin, meanwhile, offers a proven high-speed semi-planing monohull based on Fincantieri designs that have set trans-Atlantic speed records.
The General Dynamics LCS team is led by General Dynamics Bath Iron Works shipbuilder as prime integrator, with Austal of Mobile, AL (a subsidiary of Austal Ships of Australia) as the main design partner and ship-building site. The team also includes GD subsidiaries General Dynamics Armament and Technical Products Division in Burlington, VT; General Dynamics Electric Boat Division in Groton, CT; General Dynamics Advanced Information Systems in Fairfax, VA; and General Dynamics Canada in Ottawa, Ontario. Other key participants include the Boeing Company in Seattle, WA; BAE Systems in Rockville, MD; L3 Communications Marine Systems in Leesburg, VA; Northrop Grumman Electronic Systems in Baltimore, MD; and Maritime Applied Physics Corporation who are also located in Baltimore, MD. Bofors (gun) and Ericcson (radar) are among the minor partners whose equipment will be featured on the GD Team's proposed design.
Lockheed's core team includes various Lockheed divisions, plus naval architects Gibbs & Cox of Arlington, VA; shipbuilders Bollinger Shipyards of Lockport, LA; and shipbuilders Marinette Marine of Marinette, WI. It also includes a host of niche providers and related partnerships including Angle Incorporated, Blohm + Voss, Data Links Solutions, DRS Technologies, EADS, Fairbanks Morse Engine, Fincantieri, Izar (now NAVANTIA), L-3 Communications, MAAG Gear AG, MacTaggart Scott, NAWCAD, Raytheon, Rolls Royce, Sensytech, SPAWAR, Sperry, Terma, Unidynamics, and United Defense (now BAE Systems).
There is also some interest beyond the USA. A Dec 11/06 Austal release adds that foreign interest is rising, and cites a figure of "...reported 26 potential buyers exist worldwide for the ship and its companion equipment with two near-term contenders and four others that have expressed active interest." DID notes releases and information below that pinpoint Israel (Lockheed version) and Saudi Arabia (GD/Austal version) as two of those possible foreign sales.