Report: Fuel factors less than price for LCS - Navy News | News from Afghanistan & Iraq - Navy Times

Report: Fuel factors less than price for LCS

Fuel costs for the Navy’s new Littoral Combat Ship are calculated by a new Congressional report to be about 11 percent of total life-cycle costs — far less than the 64 percent figure represented by the price to buy the ship.

The relative insignificance of the fuel figure to the purchase price is at odds with claims by Alabama’s Senate delegation that the Navy should give more weight to fuel efficiency in its pending choice of which LCS to buy. Navy officials have repeatedly said that the selection, expected sometime this summer, will be based largely on purchase price rather than lifecycle costs.

Sen. Jeff Sessions, R-Ala., asked the Congressional Budget Office to study the effect of fuel costs and other factors on lifecycle costs. Sessions is supporting the aluminum-hulled trimaran LCS design built by Austal USA in Mobile, Ala. That ship is competing with a Lockheed Martin LCS built in Wisconsin.

Sessions and his Senate colleague, Richard Shelby, R-Ala., have repeatedly said the Austal USA ship is more fuel-efficient than the Lockheed ship, particularly at higher speeds.

Actual figures have yet to be gathered for both designs, for while the first Lockheed ship, USS Freedom (LCS 1), has been in service for over a year, the first Austal USA ship, USS Independence (LCS 2), only left her builder’s yard a month ago and has yet to demonstrate a full range of operations.

The CBO based its analysis on several earlier classes of Navy ships and used Navy data for the new ships. The study was conducted by Eric Labs and Derek Trunkey.

The study, sent to Sessions on Wednesday, looked at three overall operating profiles for LCS 1 — low-fuel, where the ship operates most of the time at low speeds, running at 30 knots or more only about 3 percent of the time; moderate-fuel, where high-speed operations take place about 5 percent of the time; and high-fuel, where the ship spends about a fifth of its time at 30 knots or more.

Labs and Trunkey considered that the moderate-fuel ship is “the most likely of the three scenarios.”

CBO concluded that, as a percentage of life-cycle costs, fuel costs made up 8 percent of the low-fuel ship, 11 percent for the moderate-fuel ship, and 18 percent of the high-fuel ship.

Comparatively, procurement cost for the low-fuel ship made up 66 percent of the life-cycle cost, 64 percent for the moderate-fuel ship and 58 percent of the high-fuel ship.

Undaunted, Sessions released a statement Wednesday that read in part, “Based on the information released today, it is apparent to me that the Navy’s calculation of lifecycle costs for the Littoral Combat Ship significantly undervalues the cost of fuel over the operating life of the vessel. This is a fundamental error in the Navy’s evaluation criteria, and a failure to correct it could call into question the Navy’s final selection in this important procurement program.”

Sessions added that, “a failure to properly weigh fuel consumption … would disadvantage the more fuel-efficient ship, an unacceptable mistake given the impact that fuel consumption has on military operations, and the Navy’s repeated call for energy efficient vessels.”

“Given that the LCS program will make up nearly 20 percent of the Navy’s fleet over the next 25 years, even small savings in fuel should be valued,” Sessions added. “The report released by CBO today confirms my concerns.”