US Navy Hits the Wrong Kind of Targets

Last week Defense News reported on the increasingly bloated cost of the first two ships of the new LCS class. Originally, the baseline price of LCS-1 and LCS-2 was designated to be 220 million dollars each. Accordingly to the navy, both ships cost over double that amount in basic construction costs. That seems bad enough, but when the rest of the costs incurred in development are factored in, LCS-1 comes in at an obscene 631 million dollars, while LCS-2 tips the fiscal scales at 636 million dollars.

The lone silver lining in this mess is Defense Industry Daily's note that the Congressional Budget Office released estimates last July forecasted the first two ships to come in at 630 million dollars apiece. So while the Navy struggles to build anything approaching a respectable class of new ships, at least they can match CBO estimates down to the nearest ten million dollars. The same CBO estimate gives an average figure of 450 millions dollars for the LCS class as a whole. It will extremely interesting to see how that Navy requirement of 55 ships holds up under budgetary scrutiny.

At this point, I'm not sure that the Navy shouldn't use the two LCS prototypes as demonstrators and use the technology developed to adapt something like the Swedish Visby Corvettes or the Israeli-owned, American-made Saar-5 Corvettes. Using off-the-shelf platforms , there's a good chance the Navy could do better than nearly a half-billion dollars per ship. The LCS was supposed to be the low end of a High-Low mix of ships, but I can't imagine such expensive and underarmed ships being put in harm's way. This could be the most troubled procurement program in the entire US military.