January 17, 2007

Navy’s Stop-Work Order for Lockheed Ship Won’t Sink Bath Iron Works’ Version

By Bart Jansen, Portland Press Herald, Maine

Jan. 16--WASHINGTON -- The Navy's decision to stop work on Lockheed Martin Corp.'s version of a shallow-water combat vessel won't affect a different version of the ship that Bath Iron Works is designing, according to a General Dynamics spokesman.

Navy Secretary David Winter on Friday announced the 90-day stop-work order because of significant cost overruns on Lockheed's littoral combat ship, which is being built at Bollinger Shipyard in Lockport, La. The Maine shipyard is part of the team building a rival version of the ship in Alabama.

"This is not General Dynamics," said Kendell Pease, spokesman for GD, BIW's parent company. "This is about Lockheed." Staffers for Sen. Susan Collins, R-Maine and a member of the Armed Services Committee, were briefed about the stop-work order Friday and told that BIW's work on the project is not affected.

"Moreover, the BIW-led team has not experienced the excessive cost overruns that caused the Navy to issue its order," Collins said in a statement. "In addition, it is clear that the Navy remains committed to the LCS program because of the capabilities that the LCS provides for operations in littoral waters." The Navy plans a fleet of 55 littoral combat ships costing tens of billions of dollars to fight in coastal regions against submarines, small surface ships and enemy mines.

The Navy secretary didn't outline the precise increases that sparked his concern with the Lockheed project. The Navy awarded the contract to Lockheed for the third ship in the fleet on June 26 for $197.6 million.

"I determined that at this point in time it was critical to stop work on LCS-3 to assess the LCS program and ensure we understand the program's cost and management processes before we move forward," Winter said. "It is essential that we complete LCS-1 and get it to sea so we can evaluate this new ship design." Auditors at the Government Accountability Office have warned about proceeding too quickly on designing innovative warships before determining that each facet of the highly technical ships works and fits together well.

A GAO study last March reported the price tag had jumped from an initial estimate of $212 million to $274 million in President Bush's last budget request, a 29 percent increase. The cost for the first editions of the vessel reportedly rose above $300 million.

"While it is beyond dispute that both the Navy and the nation need the littoral combat ship, significant cost overruns could impact the future of this vital program," Sen. Olympia Snowe, R-Maine, said in a statement.

"These are tight budgetary times and the Congress will expect a detailed review explaining why the first LCS is expected to cost 50 percent more than what was initially budgeted." Without citing specific cost increases, Lockheed officials told The Associated Press that several issues raised costs, including incorrect gears supplied by vendors, a six-month delay in receiving high-grade steel and the Navy's decision to apply standard production rules when building the ships.

BIW is the project manager for a team building the second and fourth ships in the series. But in contrast to Lockheed, which is building a traditional ship, the BIW design team is pursuing a different concept that features a trimaran hull designed to be stable enough for helicopters to take off from in high seas.

The BIW team's version is 127 meters long, it aims to travel nearly 50 knots and it will support two SH-60 helicopters that can operate nearly simultaneously.

The ships are actually being built at Austal USA's shipyard in Mobile, Ala.

A handful of BIW workers have been sent from Maine to Alabama to support Austal's efforts. There's a chance that BIW might someday build the littoral combat ships, if Navy demand is great enough.

The first edition of the BIW-designed ship, called USS Independence, is about half-finished, Pease said. The Navy just awarded the team a $208 million contract Dec. 8 for the second BIW-designed ship, and fourth overall in the series.

Pease said BIW provides "program management to ensure the Navy gets the most affordable, most high-tech warship possible." Despite the setback for Lockheed, Navy officials reiterated their commitment to the ship program generally.

"The littoral combat ship program remains of critical importance to our Navy," said Adm. Mike Mullen, the chief of naval operations.


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