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Navy orders another LCS

The long-delayed order for a third Littoral Combat Ship came through Monday when the Navy and Lockheed Martin agreed on a construction contract.

The ship, to be named Fort Worth (LCS 3), will be built at Marinette Marine Corp., in Marinette, Wis., and delivered to the Navy in December 2012.

The contract award comes after protracted negotiations between Lockheed and the Navy on a fixed-price incentive fee contract. The Navy did not disclose the amount of the contract award, citing the competitive nature of the contract award.

Congress has imposed a $460 million-per-ship cost cap on the LCS program, but the cost cap is not to take affect until the next budget.

Lockheed is in competition with General Dynamics to build the LCS. GD remains in negotiation with the Navy over a construction contract for the Coronado (LCS 4).

Only two LCS ships have been built thus far. The Freedom (LCS 1), from Lockheed, was commissioned in November and is at Norfolk, Va.; construction of GD’s Independence (LCS 2) is continuing, with the ship expected to be delivered to the Navy this fall.

The troubled LCS program has experienced a spiraling series of cost overruns that have more than doubled the original $220 million-per-ship price tag for the new type of warship. The Navy revealed the cost growth at the beginning of 2007, and in April and October of that year canceled construction contracts with Lockheed and GD, respectively, for the second LCS ship from each of those companies. The Navy tried to renegotiate each of those second-ship contracts, ordered in 2006, to more favorable terms, which the shipbuilders were unable to meet.

The contract award announced March 23 uses funds appropriated in fiscal 2009, although the contract re-uses the hull number of the 2006 ship. Such a practice is unusual, in that the hull number is also considered an account identification number for bookkeeping purposes.

Revised acquisition costs for each of the first two ships have yet to be revealed by the Navy, and discussion of the new contract costs for LCS 3 and LCS 4 won’t be revealed until after the next round of contract awards, to be conducted for the fiscal 2010 ships, according to a Navy spokesman.

“The amounts will be released when the fiscal 2010 competition is over,” said Lt. Cmdr. Victor Chen, a spokesman for the Navy’s acquisition team.

The Navy plans to ask for three more LCS ships in the 2010 budget request, with two ships going to the competitor offering the best terms.

All the new LCS ships are referred to by the Navy as “Flight 0+” ships, with minor modifications over the initial, Flight 0, ships.

A total of 55 LCS ships are to be procured by the Navy, which is leaving open the option to continue to build both designs or only one type.