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McCain: LCS shows spending out of control

The Littoral Combat Ship program got some high-profile attention in the presidential campaign on Friday, but probably not the kind the Navy wants. GOP presidential hopeful Sen. John McCain cited it as an example of government waste.

“I think that we have to return — particularly in defense spending, which is the largest part of our appropriations — we have to do away with cost-plus contracts. We now have defense systems that the costs are completely out of control,” McCain said during his debate with the Democratic nominee, Sen. Barack Obama. “We tried to build a little ship called the littoral combat ship that was supposed to cost $140 million, ended up costing $400 million, and we still haven’t done it.”

In reality, cost for each ship began around $220 million, and experts estimate that figure to balloon to as much as $700 million. The first ship, Freedom, was delivered to the Navy on Sept. 18, and the second ship, Independence, is slated for delivery some time next year.

McCain’s solution to problems such as LCS is to require the government to issue only “fixed-cost” contracts, which, in his view, would keep projects such as LCS from running over-budget. It’s not clear, however, whether McCain’s proposal would have kept down costs for the two ships, which were being built before their designs were complete and for which there’s already a congressionally imposed cost cap on future ships.

Last year, Navy Secretary Donald Winter canceled construction of the third and fourth ships due to delays and cost overruns.

The LCS program came up during the debate after a question from moderator Jim Lehrer about how the proposed $700 billion Wall Street bailout plan — rejected Monday by the House — would affect each candidate’s spending proposals. Obama said some of his plans would be delayed, and that “there’s no doubt that we’re not going to be able to do everything that I think needs to be done.”

McCain, rather than discussing elements of his program that he’d eliminate, talked about the need to control government spending. Along with the “fixed-cost” defense contracts, McCain said he would eliminate federal subsidies for ethanol.

The original concept for LCS — a small, lightly armed ship that can accept interchangeable equipment for surface warfare, anti-mine and anti-submarine missions — included the notion that the Navy could build a large fleet for a comparatively low unit cost. When design and construction began in 2002, the Navy wanted its first two ships, built with drastically different materials and designs, to cost around $220 million apiece. Although there are no final cost figures for either ship, both are late and more than 100 percent over-budget, and congressional reports have estimated they could finally cost as much as $700 million each.

The cost cap for future ships, as mandated by Congress, is $460 million, although the defense authorization bill delays implementing it for another year. In that same bill, Congress set aside $920 million for a second try at building the third and fourth littoral combat ships.

The first ship, Freedom, is a traditional steel mono-hull, designed to reach high speeds with a novel water-jet propulsion system, rather than with conventional propellers, and to skim partially over the water. The ship was built in Wisconsin by an industry group led by Lockheed Martin, and was delivered to the Navy Sept. 18. It is scheduled to be commissioned Nov. 8 in Milwaukee.

LCS 2, the Independence, is an aluminum trimaran, also equipped with high-speed water-jets, built in Alabama by a group led by General Dynamics. The ship is in the water, but isn’t expected to be delivered until sometime next year.