From the U.S. Government Accountability Office, www.gao.gov Transcript for: Littoral Combat Ship Description: Audio interview by GAO staff with Michele Mackin, Director, Acquisition and Sourcing Management Related GAO Work: GAO-13-530: Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue Amid Substantial Unknowns about Capabilities, Use, and Cost Released: July 2013 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's July 2013. The Navy has been developing small, fast ships that are easily configurable for many types of operations conducted in the Littoral Zone, or close to shore. The $40 billion Littoral Combat Ship Program has experienced challenges such as cost growth and schedule delays. A team lead by Michele Mackin, a director in GAO's Acquisition and Sourcing Management team, recently assessed the status of the program. GAO's Sarah Kaczmarek sat down with Michele to talk about what they found. [ Sarah Kaczmarek: ] What's the goal of the Littoral Combat Ship Program? [ Michele Mackin: ] This program has three primary missions; surface warfare, anti-submarine warfare, and mine countermeasures. And the Navy's taking a novel approach to this procurement. They're buying sea frames, which is essentially the ship's hulls, which are being manufactured at two different shipyards with two different designs, and then the concept is that the mission modules for the three missions will be interchangeable to provide sensors and weapons to fulfill the missions on the ships. [ Sarah Kaczmarek: ] Now, your team looked at both progress and challenges associated with this program. Can you talk first about the progress here? [ Michele Mackin: ] Sure, as the two shipyards have continued to build ships, they've realized production efficiencies in the yards. They've also made significant improvements to their facilities, and our analysis also showed that quality defects have been declining over time, as well as the cost of the sea frames. In addition, the Navy points to the recent deployment of the first LCS to Southeast Asia as a key milestone that will allow it to gain knowledge about the ship and to give the crew some hands-on experience with how the ship operates. [ Sarah Kaczmarek: ] And what have been some of the key challenges? [ Michele Mackin: ] There have been several challenges with this program. For example, weight control has been an issue with the sea frames, and the Navy views that as a top technical risk to the program. Also, developmental testing of the mission modules has shown some challenges with those modules performing as expected. But in our view, the key challenge is really that the Navy's continuing to procure sea frames and mission modules while key testing has not yet been completed. In fact, there are some ongoing studies that the Navy is undertaking that could lead to potentially significant design changes on the ship, which could drive cost increases down the road. For example, the need to perhaps accommodate larger crews than anticipated and to increase commonality between the two variants. [ Sarah Kaczmarek: ] And how sound is the Navy's business case here? [ Michele Mackin: ] The Navy's business case has changed and degraded over time. It originally began as an affordable $220 million ship. That cost is now over $400 million. In addition, the crew size was anticipated to be very small; about a quarter of the size of comparable ships. Now there's some questions in the Navy about whether that will be feasible or not. Also, the original business case was to construct only 2 ships for research and development and experimentation purposes, but the Navy has continued to buy sea frames and mission modules, and in fact, already has 16 sea frames funded and more under contract, and it anticipates awarding another contract for more sea frames in 2016. And finally, the concept of swapping the mission modules in and off of the sea frames was supposed to be quick -- only a matter of days -- but there are questions now about the feasibility of that. [ Sarah Kaczmarek: ] And given these challenges, what's GAO recommending be done here? [ Michele Mackin: ] We believe that given the apparent disconnect between the requirements of the Navy and the acquisition approach that the Navy has embarked on, that a pause is needed. So we're recommending that DOD slow down the acquisition, and before awarding any new contract awards, report to Congress on the relative advantages and disadvantages of the sea frame variants and reevaluate its capabilities. We're also recommending that the Navy slow down its procurement of the mission modules. We, in addition, have a matter for Congressional consideration in this report; that Congress consider restricting funding for any additional sea frames until the ongoing technical studies are complete that could inform changes to the ship's design in the future. [ Sarah Kaczmarek: ] Finally, for taxpayers concerned about this multi-billion dollar program, what's the bottom line here? [ Michele Mackin: ] Well, taxpayers are being asked to spend a lot of money on this program before the Navy determines exactly what its requirements are and how this ship will be used. As I mentioned, key testing events have not yet been completed. We think significant questions remain about this program and even in the Navy, there are some questions. The issue is not that things should have gone better or smoother, it's the misalignment of the procurement approach with the Navy's knowledge about the ship's costs, capabilities, and how it will be used. [ Background Music ] [ Narrator: ] To learn more, visit gao.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the Congressional Watchdog, the U.S. Government Accountability Office.