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Report to Congressional Committees:

United States Government Accountability Office:

GAO:

March 2005:

Defense Acquisitions:

Plans Need to Allow Enough Time to Demonstrate Capability of First 
Littoral Combat Ships:

GAO-05-255:

GAO Highlights:

Highlights of GAO-05-255, a report to congressional committees

Why GAO Did This Study:

To conduct operations in littorals—shallow coastal waters—the Navy 
plans to build a new class of surface warship: the Littoral Combat Ship 
(LCS). LCS is being designed to accomplish its missions through systems 
operating at a distance from the ship, such as helicopters and unmanned 
vehicles, and that will be contained in interchangeable mission 
packages. The Navy is using an accelerated approach to buy the LCS, 
building the ships in “flights.” Flight 0, consisting of four ships, 
will provide limited capability and test the LCS concept. The schedule 
allows 12 months between the delivery of the first Flight 0 ship and 
the start of detailed design and construction for Flight 1 ships. 
Estimated procurement cost of the Flight 0 ships is $1.5 billion.

The Congress directed GAO to review the LCS program. This report 
assesses the analytical basis of LCS requirements; the Navy’s progress 
in defining the concept of operations; the technical maturity of the 
mission packages; and the basis of recurring costs for LCS.

What GAO Found:

The formal analysis of requirements for U.S. littoral combat 
operations—conducted after the Navy established the LCS 
program—examined a number of options, such as the extent to which 
existing fleet assets or joint capabilities could be used. While the 
Navy concluded that the LCS remained the best option, it focused on LCS 
requirements for combating small boats. The Navy did not conduct an 
analysis of the impact of larger surface threats LCS may face. Such 
threats may increase the risk to LCS operations when no other nearby 
U.S. forces are available to help. 

The Navy has developed both a broad concept and more detailed plans on 
how the LCS will be employed. It has also identified a number of 
challenges that could put the LCS concept at risk, such as manning, 
logistics, and communications. For example, reduced manning—a key goal 
of the LCS program—may not be achievable because maintaining and 
operating the ship’s mission packages, such as the MH-60 helicopter, 
may require more sailors than the current design allows. Further, the 
Navy has not yet incorporated the numbers of helicopters that will be 
needed to fulfill LCS’ s concept of operation into its force structure 
and procurement plans. If the Navy’s efforts to meet these challenges 
are not successful, the Navy may not have sufficient time to experiment 
with the Flight 0 ships and integrate lessons learned into planning and 
designing for follow-on ships.

While the Navy designed the first LCS to rely on proven technologies 
and systems, a number of technologies to be used in LCS’s mission 
packages have yet to be sufficiently matured—that is, they have not 
been demonstrated in an operational environment—increasing the risk of 
cost and schedule increases if the technologies do not work as 
intended. Technologies must also be demonstrated for systems on the LCS 
seaframe. Other factors may affect the availability of mature 
technologies and subsystems, such as making the modifications necessary 
for adaptation to the LCS and transitioning projects from the 
laboratory to production. Collectively, these technology issues pose an 
additional challenge to the Navy’s ability to sufficiently experiment 
with Flight 0 ships in time to inform the design efforts for follow-on 
ships. 

Procurement costs for the Flight 0 ships remain uncertain. The basis 
for the seaframe cost target—$220 million—appears to be more defined 
than for the mission packages, as the Navy has performed various cost 
analyses that consider the challenges in detailed design and 
construction. The Navy seeks to meet the cost target by trading between 
capability and cost. Cost data for the Flight 0 mission packages are 
not as firm in part because of the uncertainties associated with 
immature technologies. 

What GAO Recommends:

GAO recommends that the Navy analyze the effect of larger surface 
threats on LCS operations, incorporate the impact of LCS into 
helicopter force structure, and sufficiently experiment with Flight 0 
ships before selecting a Flight 1 design. The Department of Defense 
partially concurred with GAO’s recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-05-255.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Paul Francis at (202) 
512-2811 or francisp@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

Navy Conducted Detailed Analysis of LCS Requirements, but Surface 
Threat Risk Is Unclear:

A Detailed Concept of Operations Has Been Developed for LCS but Faces a 
Number of Challenges in Implementation:

Immaturity in Mission Package Technologies Could Decrease the 
Experimental and Operational Utility of Flight 0 Ships:

Procurement Cost Estimates Are Uncertain:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Review:

Appendix I: Scope and Methodology:

Appendix II: Comments from the Department of Defense:

Appendix III: GAO Contacts and Staff Acknowledgments:

Tables:

Table 1: Examples of Littoral Combat Ship Missions:

Table 2: Navy's Comparison of Materiel and Nonmateriel Solutions for 
Mitigating Gaps in the Littorals:

Table 3: Examples of Mission Warfare Tasks and Related Capability Gaps 
in the Littorals:

Table 4: Challenges for LCS and Examples of Navy Mitigation Efforts:

Table 5: Mine Warfare Mission Package Status:

Table 6: Antisubmarine Warfare Mission Package Status:

Table 7: Surface Warfare Mission Package Status:

Table 8: Current Estimated Costs for Flight 0 Mission Packages:

Table 9: Technology Readiness Levels and Their Definitions:

Figures:

Figure 1: Flight 0 LCS Designs:

Figure 2: LCS Acquisition Timeline:

Abbreviations:

DOD: Department of Defense:

LCS: Littoral Combat Ship:

TRL: Technology Readiness Level:

United States Government Accountability Office:

Washington, DC 20548:

March 1, 2005:

The Honorable John Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate:

The Honorable Duncan L. Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives:

The Navy has begun to build a new class of surface warship--the 
Littoral Combat Ship (LCS)--to address the challenges of operating U.S. 
military forces in the shallow waters close to shore, known as the 
littorals. The three principal threats it is expected to address are 
from mines, small surface boat attacks, and submarines. The LCS differs 
from existing types of Navy surface warships in two critical ways. 
First, it will accomplish its mine, antisubmarine, and surface warfare 
missions primarily through the use of helicopters, unmanned vehicles 
and other systems that operate at a distance from the ship itself. 
Second, the systems used to conduct each main or focused mission will 
be contained in mission packages; for example, one mission package will 
consist of the systems needed for detecting, engaging, and neutralizing 
mines. The mission packages will be interchangeable, so that the LCS 
can be rapidly reconfigured for different missions. Similar to the 
concept for an aircraft airframe that can change missions depending on 
the systems carried, the Navy refers to the LCS hull as a seaframe. The 
concept of mission packages and the ability to shift among the three 
focused missions of the ship concentrates each LCS on a single focused 
mission at a time as opposed to larger multimission surface ships, such 
as the Arleigh Burke guided missile destroyers and Ticonderoga guided 
missile cruisers. However, the Navy envisions that, like other surface 
ships, the LCS will be capable of conducting certain core missions and 
functions, such as self defense, regardless of the mission package on 
board.

The Navy seeks to rapidly build and deploy LCS and has developed an 
accelerated acquisition schedule that includes delivery of four ships, 
two each of different designs, between fiscal years 2007 and 2009 with 
delivery of follow-on ships of a single design beginning in fiscal year 
2010. The Congress recently inserted a year into the schedule between 
the construction of the first and second ship of each design, which may 
affect the schedule for all subsequent ships. The Navy is developing 
LCS using an evolutionary acquisition approach. Capabilities are 
delivered by "flight" with the first four ships referred to as Flight 0 
and the next increment of capability as Flight 1. Flight 0 will provide 
an initial limited capability and platforms to experiment with the 
critical mission technologies and test the overall concept. Flight 1 
will provide greater capability and serve as the basis for learning 
lessons that will be incorporated into additional follow-on ships. The 
Navy has not decided how many total ships it will build, though 
currently it estimates that between 50 and 60 ships may be built. The 
Navy's cost target for each of the four Flight 0 ships is approximately 
$370 million. This includes $220 million for the seaframe and 
approximately $150 million for mission packages (the cost of six 
packages averaged over four ships).

The Senate report[Footnote 1] accompanying the National Defense 
Authorization Act for Fiscal Year 2004[Footnote 2] and the House of 
Representatives report[Footnote 3] accompanying the Ronald W. Reagan 
National Defense Authorization Act for Fiscal Year 2005[Footnote 4] 
directed that we assess four key areas of the LCS program. Accordingly, 
this report assesses (1) the analytical basis of LCS requirements; (2) 
the Navy's progress in defining the concept of operations; (3) the 
technical maturity of the mission package systems; and (4) the basis of 
recurring costs for the seaframe and mission packages.

To assess the four key areas of the LCS program, we held discussions 
and reviewed documents at a number of Navy offices, including the 
program offices for LCS and its supporting mission package systems, 
Navy headquarters, the Naval War College, and Navy Warfare Development 
Command. We identified and analyzed key Navy documents, including those 
related to capability gaps; requirements; concepts; acquisition 
planning; consideration of critical doctrinal, logistical, and 
operational considerations;[Footnote 5] technology assessment and 
maturity plans; and cost analyses. Our analyses of technology maturity 
and costs focused on Flight 0. Details of the costs and technologies 
for the seaframe are sensitive, due to the ongoing competition. We 
therefore do not discuss these at length. Further details on our scope 
and methodology are in appendix I.

Results in Brief:

Though the Navy conducted a formal requirements process and an analysis 
of other potential solutions, it did so after concluding that the LCS 
concept was the best option to address challenges of operating U.S. 
forces in the littorals. Normally, a major acquisition program should 
include an examination of basic requirements and an analysis of 
potential solutions before a new system is decided upon. Based on 
Department of Defense (DOD) reviews of the Navy's analysis and the 
requirements of revised acquisition guidance, the Navy eventually 
examined a number of alternative solutions to address littoral 
capability gaps, such as the extent to which existing fleet assets or 
joint capabilities could be used. The Navy still concluded that the LCS 
concept was the best option. However, the Navy's analysis of one area 
of littoral operations--the surface threats facing U.S. forces in 
littoral waters--did not include consideration of the potential impact 
of all threats the LCS is likely to face. For example, while the 
requirements for LCS are focused on combating small boats, the LCS 
could face threats larger than small boats in littoral waters, 
including missile-armed warships. Though LCS is to rely on support from 
other nearby U.S. forces, the Navy also intends for LCS to operate 
independently of those forces. The Navy has not analyzed the risks such 
threats could pose to LCS operations and survivability.

The Navy has developed a broad concept of operations that addresses the 
key operations of the ship and continues to develop more detailed 
planning on how the LCS and its mission systems will be used. The Navy 
has also identified challenges in such areas as manning; logistics; 
command control, communications, computers, and intelligence; and force 
structure that are critical and may increase risk to the success of the 
concept. The Flight 0 ships will be the primary means for determining 
whether these challenges can be met. While the Navy is working to meet 
these challenges, to the extent they are not met, the Flight 0 ships 
could provide less capability than planned and less experimentation to 
inform the design of the Flight 1 ships. For example, reduced manning 
is one of the key goals of the LCS program. If the Navy discovers that 
it needs more sailors to operate the ship's critical mission package 
systems than the Flight 0 design can accommodate, significant changes 
may have to be made in the Flight 1 requirements. The MH-60 helicopter, 
which will operate from LCS and is critical to all its missions, 
embodies a number of these challenges. The number of personnel required 
to operate and maintain the helicopter may be greater than the Flight 0 
design can accommodate. Further, the Navy's current force structure and 
procurement plans do not include the numbers of helicopters that will 
be needed to fulfill LCS's concept of operation.

A number of the technologies chosen for the LCS mission packages are 
not yet mature, meaning that they have not been demonstrated in an 
operational environment, which is a best practice for major acquisition 
programs. Immature technologies increase the risk that some systems 
will not perform as expected and may require additional time and 
funding to develop. The impact of delayed technology is less capability 
for the Flight 0 ships and less information for the Flight 1 ship 
design. Other issues beyond technology maturity could prevent some 
technologies from being available in time for the first ship. For 
example, some technologies considered mature may require alterations to 
operate from LCS. Some of the technologies still in development face 
challenges transitioning into production, while other mature 
technologies may not be available for LCS. Challenges also remain for 
technologies included on the LCS seaframe, including those for 
communications, software, launch and recovery, and command and control 
of off-board systems.

The cost to procure the first flight of LCS remains uncertain, with 
seaframe costs more defined than the mission package costs. The basis 
of the procurement costs for the LCS seaframe appears to be more 
defined since the Navy has performed a series of cost analyses to 
anticipate the challenges in detailed design and construction. The Navy 
seeks to stabilize seaframe costs by establishing a $220 million cost 
target and is working to meet this target by trading between capability 
and cost while assuring that seaframe performance meets threshold 
requirements. As many of the technologies for the mission packages 
remain immature, cost data for procurement of these technologies are 
not as firm. Other mission package costs, such as procurement costs for 
MH-60 helicopters, are not covered by LCS program cost analyses. In 
addition to issues with procurement costs, development costs for the 
LCS could expand if more time and effort is needed to mature the 
technologies in the mission packages and the seaframe.

We are making three recommendations to help the Navy assess and 
mitigate operational, force structure, and technology risks associated 
with LCS. We are recommending that (1) the Navy analyze the effect and 
mitigate any risks associated with a larger surface threat on LCS 
operations and the impact on other naval forces in support of those 
operations; (2) the Navy incorporate into its continuing efforts 
consideration of the impact of LCS operations on helicopter force 
structure and procurement plans as well as efforts to address the 
manning, technology, and logistics impacts of helicopter operations 
from LCS; and (3) the Navy revise its acquisition strategy to ensure 
that it has sufficiently experimented with Flight 0 ships and mission 
packages before selecting the design for Flight 1. In comments on a 
draft of this report, DOD partially concurred with our recommendations 
and described steps it will take to implement them.

Background:

According to Navy guidance, the Navy is required to project power from 
the sea and maintain assured access in the littoral regions, which for 
naval vessels refers specifically to the transition between open ocean 
to more constrictive shallower waters close to shore--the littorals. 
"Anti-access" threats from mines, submarines, and surface forces 
threaten the Navy's ability to assure access to the littorals. The LCS 
is being developed to address these missions. The LCS design concept 
consists of two distinct parts, the ship itself and the mission package 
it carries and deploys. For LCS, the ship is referred to as the 
"seaframe" and consists of the hull, command and control systems, 
launch and recovery systems, and certain core systems like the radar 
and gun. A core crew will be responsible for the seaframe's basic 
functions. Operating with these systems alone offers some capability to 
perform general or inherent missions, such as support of special 
operations forces or maritime intercept operations. The LCS's focused 
missions are mine warfare, antisubmarine warfare, and surface warfare. 
The majority of the capabilities for these missions will come from 
mission packages. These packages are intended to be modular in that 
they will be interchangeable on the seaframe. Each mission package 
consists of systems made up of manned and unmanned vehicles and the 
subsystems these vehicles use in their missions. Additional crew will 
be needed to operate these systems. Each mission package is envisioned 
as being self contained and interchangeable, allowing tailoring of LCS 
to meet specific threats. Table 1 shows examples of LCS's focused and 
inherent missions.

Table 1: Examples of Littoral Combat Ship Missions:

Focused missions: Littoral mine warfare; 
Examples of tasks: 
* Detect, avoid, and/or neutralize mines; 
* Clear transit lanes; 
* Establish and maintain mine cleared areas.

Focused missions: Littoral antisubmarine warfare; 
Examples of tasks: 
* Detect all threat submarines in a given littoral area; 
* Protect forces in transit; 
* Establish antisubmarine barriers.

Focused missions: Littoral surface warfare; 
Examples of tasks: 
* Detect, track, and engage small boat threats in a given littoral 
area; 
* Escort ships through choke points; 
* Protect joint operating areas.

Inherent Missions: Battle space awareness; 
Examples of tasks: 
* Intelligence, surveillance, and reconnaissance.

Inherent Missions: Joint littoral mobility; 
Examples of tasks: 
* Provide transport for personnel, supplies and equipment within the 
littoral operating area.

Inherent Missions: Special operations forces support; 
Examples of tasks: 
* Provide rapid movement of small groups of special operations forces 
personnel; 
* Support hostage rescue operations; 
* Support noncombatant evacuation operations; 
* Support and conduct combat search and rescue.

Inherent Missions: Maritime interdiction/interception; 
Examples of tasks: 
* Provide staging area for boarding teams; 
* Employ and support MH-60 helicopters for maritime interdiction 
operations; 
* Conduct maritime law enforcement operations, including 
counternarcotic operations, with law enforcement detachment.

Inherent Missions: Homeland defense; 
Examples of tasks: 
* Perform maritime interdiction/interception operations in support of 
homeland defense; 
* Provide emergency, humanitarian and disaster assistance; 
* Conduct marine environmental protection; 
* Perform naval diplomatic presence.

Inherent Missions: Antiterrorism/force protection; 
Examples of tasks: 
* Perform maritime interdiction/interception operations in support of 
force protection operations; 
* Provide port protection for U.S. and friendly forces and protection 
against attack in areas of restricted maneuverability.

Source: GAO from U.S. Navy sources.

[End of table]

Navy Plans an Aggressive Schedule for LCS:

The Navy characterizes the schedule for acquisition and deployment of 
LCS as aggressive. To meet this schedule, the Navy is pursuing an 
evolutionary acquisition strategy. Rather than initially delivering a 
full capability, the program is structured to deliver incremental 
capabilities to the warfighter. To support this, LCS acquisition is 
broken into "flights" for the seaframe and "spirals" for mission 
packages in order to develop improvements while fielding technologies 
as they become available. The initial flight of ships, referred to as 
Flight 0, will serve two main purposes: provide a limited operational 
capability and provide input to the Flight 1 design through 
experimentation with operations and mission packages. Flight 1 will 
provide more complete capabilities but is not intended to serve as the 
sole design for the more than 50 LCS the Navy plans to ultimately buy. 
Further flights will likely round out these numbers. Flight 0 will 
consist of four ships of two different designs and will be procured in 
parallel with the first increment of mission packages--Spiral Alpha. 
Flight 0 ships are currently being designed, and construction on the 
first ship will begin in 2005. Due to the accelerated schedule, Spiral 
Alpha will consist primarily of existing technologies and systems. 
Spiral Bravo mission packages will be improvements upon these systems 
and are intended to be introduced with the Flight 1 ships. Figure 1 
shows the two designs chosen by the Navy for Flight 0, one by Lockheed 
Martin and one by General Dynamics.

Figure 1: Flight 0 LCS Designs:

[See PDF for image]

[End of figure]

The Navy and Lockheed Martin signed a contract for detailed design and 
construction of the first Flight 0 ship in December 2004, and the ship 
builder is expected to deliver the ship to the Navy in fiscal year 
2007. The Navy will then begin testing and experimenting with the ship, 
using the first mission package--mine warfare. A date for any 
deployment with the fleet has not been determined. Detailed design and 
construction for the first General Dynamics design ship is scheduled to 
begin in fiscal year 2006 and delivery is scheduled for fiscal year 
2008. The delivery of the first antisubmarine and surface warfare 
mission packages are aligned with the delivery of the second Flight 0 
ship. Figure 2 shows the Navy's current acquisition timeline for Flight 
0, Flight 1, and their mission packages.

Figure 2: LCS Acquisition Timeline:

[See PDF for image]

Note: Based on congressional action for fiscal year 2005, ship 3 will 
start construction in fiscal year 2007.

[End of figure]

The development of Flight 1 will proceed concurrently with the design 
and construction of Flight 0. In early fiscal year 2006 the Navy will 
begin consideration of several preliminary designs for Flight 1. The 
Navy will choose designs for further development in fiscal year 2007. 
Selection of a design[Footnote 6] to start construction of the first 
Flight 1 ship will be in early fiscal year 2008. Flight 1 and future 
follow-on designs will be the basis for the LCS class of ships, which 
the Navy currently estimates could number between 50 and 60. Under the 
current acquisition strategy, detailed design and construction of the 
first Flight 1 ship will begin about 12 months after delivery of the 
first Flight 0 ship. The last two Flight 0 ships will not be available 
before detailed design and construction of Flight 1 begins. The second 
Flight 0 ship and the first mission packages for antisubmarine and 
surface warfare will be delivered just as detailed design and 
construction of Flight 1 is set to begin. Delivery of the first mission 
packages in Spiral Bravo will be aligned with delivery of the first 
Flight 1 ship.

Navy Conducted Detailed Analysis of LCS Requirements, but Surface 
Threat Risk Is Unclear:

Recognizing that it lacks a number of key warfighting capabilities to 
operate in the littorals, the Navy began to develop the concept of LCS 
as a potential weapon system before it had completed formal 
requirements. Normally, a major acquisition program should include an 
examination of basic requirements and an analysis of potential 
solutions before a new system is decided upon.[Footnote 7] The Navy 
eventually conducted a requirements development process and analyzed a 
number of alternative solutions to a new ship but concluded that the 
LCS remained the best option. However, the Navy's analysis of one area 
of littoral operations--the surface threats facing U.S. forces in 
littoral waters--did not include consideration of the potential impact 
of all threats the LCS is likely to face.

Navy Began to Develop LCS before Fully Examining Alternatives:

The Navy has known about the capability gaps in the littorals for some 
time, particularly threats from mines and submarines in shallow waters. 
As we previously reported, the Navy has acknowledged that it lacks a 
number of key warfighting capabilities it needs for operations in the 
littoral environs.[Footnote 8] For example, it does not have a means 
for effectively breaching enemy sea mines in the surf zone or detecting 
and neutralizing enemy submarines in shallow water. The Navy has had 
programs under way to improve its capabilities in each of these areas 
for many years, such as systems designed to provide the fleet with mine 
detection and limited clearing capabilities, but progress has been 
slow. Additionally, the Navy has identified the threat of small boats, 
such as the kind that attacked the U.S.S. Cole in 2000, as a potential 
hindrance to operations in the littorals. The Navy has decided that the 
LCS is to accomplish these three critical littoral missions.

After recognizing the need to address known capability gaps in the 
littorals, the Navy conducted a series of wargames to test new concepts 
for surface combatant ships. One such concept, a very small surface 
combatant ship called Streetfighter, was incorporated into the Global 
1999 war game. The concept was envisaged as a small, fast, stealthy, 
and reconfigurable ship, which included many characteristics similar to 
LCS. The Navy's war-fighting assessment processes confirmed gaps in 
capabilities for mine warfare, shallow water antisubmarine warfare, and 
surface warfare against small boats. In July 2001, the Global 2001 war 
game further examined the concepts and potential benefits of 
modularity--such as using mission packages--and use of unmanned 
vehicles for littoral missions. As a result of the wargames the Navy 
continued the process of analyzing a variety of new surface combatant 
ship concepts to address the threats in the littorals.

In 2002, the Navy established an LCS program office as it began to 
further identify concepts and characteristics for a new surface 
combatant ship. In December 2001, the Naval War College was asked to 
develop and define characteristics that would be desirable in a 
littoral combat ship. The college used a series of workshops that 
included operational and technical experts from throughout the Navy to 
compare three types and sizes of surface combatant ships and describe 
desirable characteristics that such a ship should have. The experts 
examined such characteristics as speed, range, manning, and the ability 
to operate helicopters and unmanned vehicles. The workshop participants 
also concluded that a potential littoral ship should:

* be capable of networking with other platforms and sensors,

* be useful across the spectrum of conflict,

* be able to contribute to sustained forward naval presence,

* be capable of operating manned vertical lift aircraft,

* be capable of operating with optimized manning,

* have an open architecture and modularity,

* be capable of operating manned and unmanned vehicles, and:

* have organic self defense capabilities.

The results of the Naval War College study, which was completed in July 
2002, were used as a baseline for further developing the concepts for 
LCS.

At this point the Navy's analysis was focused on a single solution to 
address littoral capability gaps--a new warship along the lines of LCS. 
Between April 2002 and January 2004, the Navy conducted an analysis of 
multiple concepts to further define the concept that would address gaps 
in the littorals. The analysis began by examining five different ship 
concepts for LCS (later focusing on three concepts for another stage) 
and provided the Navy with insight into the trade-offs between features 
such as size, speed, endurance, and self defense needs. The analysis 
was performed by the Naval Surface Warfare Center, Dahlgren Division, 
and drew upon expertise throughout the Navy.

The Office of the Secretary of Defense and the Joint Staff were 
concerned that the Navy's focus on a single solution did not adequately 
consider other ways to address littoral capability gaps. Based on these 
concerns, in early 2004, the Navy was required to more fully consider 
other potential solutions. The publication of new guidance on joint 
capabilities development in June 2003,[Footnote 9] also led the Navy to 
expand its analysis beyond the single solution of the proposed new ship 
to include other potential solutions to littoral challenges.

As part of its resulting analysis, the Navy defined littoral capability 
gaps, developed requirements to address those gaps, and identified and 
examined 11 nonmateriel and 3 materiel solutions across the joint 
forces that could be used to mitigate gaps in the littorals. 
Nonmateriel solutions refer to the use of different operational 
concepts or methods to meet requirements without buying new assets such 
as additional ships; materiel solutions are those which involve 
developing equipment or systems, such as ships and aircraft. The 
solutions were analyzed to determine the feasibility and risk in 
mitigating the gaps. The Navy's assessment of feasibility centered on 
the extent to which each solution addressed the mine, antisubmarine, 
and surface capability gaps. The Navy's assessment of risk centered on 
the impacts of each solution on (1) the success of potential operations 
in the littorals, (2) the sensitivity of diplomatic considerations, 
such as the military support of other nations, and (3) the financial 
considerations involved in choosing that solution.

Two additional materiel solutions, that centered on maritime patrol 
aircraft and modified DDG-51 destroyers, were added to the Navy's 
analysis as a result of input from the Office of the Secretary of 
Defense's Program Analysis and Evaluation office and the Acquisition, 
Technology and Logistics office. The Office of the Secretary of Defense 
and the Joint Staff also provided specific questions to the Navy for 
further clarification of the Navy's ongoing analysis. With these 
additions, the Program Analysis and Evaluation office approved the 
Navy's completed analysis as satisfactory to meet the requirements of a 
full analysis of alternatives for the LCS program. Table 2 shows the 
materiel and nonmateriel solutions presented in the Navy's requirements 
analysis and the results of the Navy's analysis of operational 
feasibility, as well as operational, diplomatic, and financial risk.

Table 2: Navy's Comparison of Materiel and Nonmateriel Solutions for 
Mitigating Gaps in the Littorals:

Materiel solutions: New class of ships tailored to address maritime 
access tasks mission needs (LCS); 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Feasible; 
Navy’s risk assessment: Negligible operational risk; Negligible 
diplomatic risk; Negligible financial risk.

Materiel solutions: Additional current and programmed forces--includes 
mine countermeasures assets; 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Negligible operational risk; Negligible 
diplomatic risk; Significant financial risk.

Materiel solutions: System upgrades to existing platforms, and 
additional platforms if necessary. Supplements ships with unmanned 
vehicles and mission packages; 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Negligible operational risk; Negligible 
diplomatic risk; Significant financial risk.

Materiel solutions: Nonsurface combatant solution with emphasis on 
maritime patrol aircraft; 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Some operational risk; Some diplomatic risk; 
Negligible financial risk.

Materiel solutions: DDG-51 destroyer hull with three mission packages 
for mine, antisubmarine, and surface warfare; 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Some operational risk; Negligible diplomatic 
risk; Some financial risk.

Nonmateriel solutions: Use existing force structure; (Combination of 
assets from carrier and expeditionary strike groups); 
Gap mitigation: Significant antisubmarine, surface, and mine warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Some operational risk; Negligible financial 
risk; Negligible diplomatic risk. 

Nonmateriel solutions: Use existing force structure; (independent 
submarines); 
Gap mitigation: Significant antisubmarine mitigation; partial mine 
warfare mitigation; little to no surface warfare mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Some operational risk; Negligible financial 
risk; Negligible diplomatic risk. 

Nonmateriel solutions: Use existing force structure; (maritime patrol 
aircraft and helicopters); 
Gap mitigation: Significant antisubmarine and surface warfare 
mitigation; partial mine warfare; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Some financial risk; Some diplomatic risk; Some 
operational risk. 

Nonmateriel solutions: Use existing force structure; (Land based 
tactical aviation for surface warfare); 
Gap mitigation: Little to no antisubmarine and mine warfare mitigation; 
partial surface warfare; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant diplomatic risk; Some operational 
risk; Some financial risk.

Nonmateriel solutions: Use existing force structure; (Long range 
bombers); 
Gap mitigation: Little to no antisubmarine, mine, and surface warfare 
mitigation; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Some financial 
risk; Some diplomatic risk.

Nonmateriel solutions: Use existing force structure; (Theater-national 
overhead systems); 
Gap mitigation: Little to no antisubmarine, mine, and surface warfare 
mitigation; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Negligible 
diplomatic risk; Negligible financial risk.

Nonmateriel solutions: Assign mission to nonmilitary force; 
Gap mitigation: Little to no antisubmarine and mine warfare mitigation; 
partial surface warfare mitigation; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Some financial 
risk; Some diplomatic risk.

Nonmateriel solutions: Not entering contested littorals; 
Gap mitigation: Little to no antisubmarine, mine, and surface warfare 
mitigation; Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Significant 
diplomatic risk; Some financial risk.

Nonmateriel solutions: Preemptive actions to eliminate threat; 
Gap mitigation: Partial antisubmarine, mine, and surface warfare 
mitigation; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Significant 
diplomatic risk; Negligible financial risk.

Nonmateriel solutions: Assign tasks to coalition partners; 
Gap mitigation: Partial antisubmarine, mine, and surface warfare 
mitigation; 
Overall feasibility: Partially feasible; 
Navy’s risk assessment: Significant operational risk; Significant 
diplomatic risk; Some financial risk.

Nonmateriel solutions: Tolerate capability gaps; (Accept risk); 
Gap mitigation: Little to no antisubmarine, mine, and surface warfare 
mitigation; 
Overall feasibility: Not feasible; 
Navy’s risk assessment: Significant operational risk; Significant 
diplomatic risk; Negligible financial risk.

Source: Navy analysis.

[End of table]

Based on its analysis, the Navy concluded that the materiel and 
nonmateriel solutions they examined would not provide better 
operational and cost effective solutions than the proposed LCS to 
perform the littoral missions. A number of factors were analyzed, 
including the feasibility of using other surface and non-surface force 
solutions and the risk associated with those options. Four nonmateriel 
solutions were considered to be partially feasible for mitigating the 
gaps in the littorals, while seven other solutions were considered not 
to be feasible. Partially feasible nonmateriel solutions included the 
use of maritime patrol aircraft, submarines, and a mix of air and sea 
assets from carrier and expeditionary strike groups. The most feasible 
solution considered using a combination of existing forces from carrier 
and expeditionary strike groups. However, the Navy determined that 
during a major combat operation, this solution would not be feasible 
because other mission objectives focused on directing operations onto 
shore would take a higher priority. Some of the materiel solutions 
included expanding existing forces, upgrading existing forces, or 
procuring a new class of platforms tailored for focused missions.

Using a number of studies of threats and analyses of potential military 
operations in the littoral regions, the Navy developed requirements for 
the LCS that addressed the identified capability gaps and likely 
threats in the littorals. This analysis supported revised DOD and Joint 
Chiefs of Staff requirements for shipbuilding acquisition programs. The 
Navy identified capability gaps in the littorals by measuring the 
ability of the current and programmed joint forces to accomplish a 
number of tasks across a range of operating conditions and standards. 
The Navy concluded that based on completing the tasks in the littorals 
under the established measures of effectiveness, it lacked sufficient 
assets and technology to fully mitigate the gaps. For example, under 
mine warfare the task for clearing routes for transit lanes covering a 
specific area within a 7 day period creates a capability gap because 
the Navy concluded that its force structure lacked the number of assets 
(mine countermeasures ships, destroyers with remote mine-hunting 
systems, and the appropriate mine countermeasures helicopters) to fully 
mitigate the gap in the littorals under the operational timeline of 
seven days. Table 3 shows examples of tasks for each focused mission, 
the measures of effectiveness, and the capability gap that exists under 
the current and programmed force structure.

Table 3: Examples of Mission Warfare Tasks and Related Capability Gaps 
in the Littorals:

Mission task: Mine Warfare: Establish and maintain mine-cleared areas; 
Criteria to measure success: Clearing transit lanes within 7 days; 
Capability gaps identified with current and programmed force structure: 
Inadequate number of mine countermeasures assets in the force to clear 
transit lanes within seven days.

Mission task: Antisubmarine warfare: Protect joint operating areas; 
Criteria to measure success: Detecting submarines at 90 percent success 
rate; 
Capability gaps identified with current and programmed force structure: 
Inadequate number of assets and technology to detect submarines in 
shallow water at 90 percent success rate.

Mission task: Surface warfare: Escort through choke points; 
Criteria to measure success: Neutralizing large sets of small boats in 
a single raid; 
Capability gaps identified with current and programmed force structure: 
Gaps exist in coverage areas in defeating 50 or more small boats, due 
to shortfall in the numbers of assets. Surface combatant ships and 
helicopters only provide self defense protection.

Mission task: Protect port; 
Criteria to measure success: Neutralizing small sets of small boats in 
a single raid; 
Capability gaps identified with current and programmed force structure: 
Inadequate number of surface combatant assets and technology exists for 
defeating small boat raid in port operating area. Helicopters provide 
self defense capability only in port operating area.

Source: GAO from Navy sources.

[End of table]

LCS Requirements Analysis Did Not Cover Some Threats LCS May Face:

We analyzed the requirements the Navy developed to address littoral 
capability gaps and used to support the LCS program, tracking each 
requirement in the mine, antisubmarine, and surface warfare areas back 
to the capability gaps and threats identified by the Navy in their 
requirements development process. We found no inconsistencies in the 
specific requirements for LCS illustrated in the documents required as 
part of the joint capabilities integration and development system. 
However, the requirements the Navy arrived at for LCS's surface warfare 
capabilities were focused on small boats, and this did not include an 
analysis of the impact of larger surface threats in the littorals. The 
Navy focused the surface threat on swarms of small boats, characterized 
as Boston Whalers, capable of operating at high speeds and employing 
shoulder mounted or crew served weapons, such as light machine guns. 
These boats can conduct surprise, simultaneous, short range attacks 
from or near shorelines. The Navy measured its current and programmed 
capabilities against defeating swarms of small boats in high numbers. 
For example, to determine the capability gaps and measures of 
effectiveness for escorting ships through choke points, the Navy 
measured its force structure against defeating large numbers of small 
boats. However, larger threats, such as missile-armed patrol boats and 
frigates, are also identified in the Navy's LCS concept of operations 
and threat studies as threats that LCS may face in the littorals. Such 
vessels may be armed with medium caliber guns, torpedoes, and antiship 
missiles. These threats could present additional risk to LCS operations.

Some DOD and Navy officials have raised concerns about the extent to 
which the LCS may face larger threats than it is capable of defending 
against. Navy officials agreed that the surface threat was focused 
exclusively on swarms of small boats and told us that LCS is not 
intended to combat larger threats. The Navy found no capability gap 
with respect to the larger surface threat, because there is sufficient 
capability in the existing fleet to counter the threat. Further, Navy 
officials stated that if a larger surface threat were encountered, LCS 
would be able to call upon the assistance of other U.S. forces in the 
area, such as tactical aviation or larger surface warships. In a major 
combat operation, LCS squadrons would be able to draw upon assistance 
of those nearby Navy or joint forces in the face of a larger surface 
threat in the area. However, according to the LCS concept of 
operations, in addition to operating with other U.S forces on a regular 
basis, LCS is intended to operate independently of those forces, 
depending on the type of mission and circumstance. When operating 
independently, such as during routine deployments to littoral waters, 
LCS may not be able to call upon assistance from larger U.S. forces. 
This may impede LCS operations, such as forcing the LCS to withdraw 
from an operating area, a situation contrary to the Navy's goals. Since 
the Navy did not analyze the impact of larger surface threats on LCS 
operations, the extent of the risk and the impact on U.S. operations is 
not known.

A Detailed Concept of Operations Has Been Developed for LCS but Faces a 
Number of Challenges in Implementation:

Although there are no formal criteria for developing a concept of 
operations, the Navy has developed both a broad concept and more 
detailed plans as to how the LCS and its mission systems will be used 
to meet requirements. The concept of operations also includes several 
challenges that, if not met, may increase the risk in actual LCS 
operations. However, the Navy has not yet fully considered the LCS 
concept of operations in the force structure and procurement plans for 
the MH-60 helicopter, which is critical to all LCS missions. The Navy 
has recognized these risks and is attempting to address them. However, 
if these efforts are not successful within the time constraints of the 
schedule, the Flight 0 ships may not provide the planned capability or 
the level of experimentation needed to inform the Flight 1 design.

The Navy has developed a broad concept of operations document for LCS. 
Though there are no formal guidelines that describe how the concept of 
operations should be written or the level of detail it should contain, 
it is a high level requirements document that describes how the user 
(in this case, the Navy) will use the weapon system to address mission 
needs. The concept of operations can also be used as guidance in 
developing testable system and software requirements specifications. In 
particular, the LCS concept of operations describes how the ship will 
contribute to U.S. Joint Force operations in countering threats in the 
littorals. These include mine warfare (detecting and neutralizing 
mines), antisubmarine warfare (detecting and engaging hostile 
submarines), and surface warfare (detect, track, and engage surface 
threats). In addition to these focused missions, the LCS concept of 
operations discusses how the LCS can perform inherent missions, such as 
support for special operations forces, maritime interception operations 
and supporting homeland defense related missions. For example, the LCS 
concept of operations for maritime interception operations envisages 
use of the ship's core crew, and any additional personnel in case of 
operations in higher threat areas, to provide boat crews and boarding 
teams to board suspect vessels as well as using an embarked helicopter 
for assistance. The concept of operations is directed at Flight 0 but 
also provides a vision for follow-on ships. The document has also been 
used to build consensus among warfighters, the acquisition community, 
and the various industry teams involved in building LCS as to how the 
ship is intended to be used.

The development process for the LCS concept of operations began with 
the Navy Warfare Development Command in late 2002 when it created the 
first version of the Concept. The document described the projected 
threat context, capabilities, and operational employment of LCS to help 
industry with their designs. The Command based this version of the 
concept of operations on their experience with various pre-LCS studies 
and war games that employed fast, small ships with modular payloads. 
The Navy subsequently updated and expanded the concept of operations 
with new information that related to critical areas that impact, and 
are impacted by, LCS operations, including doctrine, training, and 
personnel. The Navy approved the LCS concept of operations in December 
2004.

The Navy is also continuing to refine concepts for how LCS and its 
mission systems will be used to address anti-access threats. These 
efforts include a Concept of Employment, which describes the way 
mission package systems are intended to be used to meet warfare 
requirements, and an analysis of performance data for individual 
systems in order to inform experiments on the actual operation of LCS 
mission systems. In addition, the Navy will incorporate lessons learned 
from Flight 0 operations into future versions of the LCS concept of 
operations.

We compared the LCS concept of operations to the approved requirements 
for the ship and the capability gaps identified by the Navy and found 
that each of the capability gaps and LCS mission requirements were 
addressed in the concept of operations. For example, the requirements 
to address the mine warfare capability gap call for mines to be 
detected, identified, and neutralized. The concept of operations 
discusses how the LCS will address these requirements by using a 
combination of helicopters and unmanned vehicles to detect and identify 
mines, and either a helicopter or an explosive ordinance disposal 
detachment with unmanned underwater vehicles to neutralize mines.

The LCS concept of operations includes several operational and 
logistical challenges that may increase the operational risk for LCS. 
One challenge is to reduce the numbers of sailors required to operate 
the ship's critical mission systems. This challenge is exacerbated by 
the limited space on the ship. If this cannot be achieved, the Navy may 
have to make significant changes to the design or capability of follow- 
on ships. Another challenge is the logistics support required to meet 
the Navy's goal of changing LCS mission packages within 4 days of 
arriving at an appropriate facility. A number of factors frame this 
challenge, including where packages are to be stored, how they are to 
be transported, and the proximity of LCS operating areas to ports 
required to swap mission packages. Any of these factors could increase 
the time required for a change in LCS mission packages once the 
decision has been made to do so. Other challenges include training; 
command, control, communications, computers, and intelligence; 
survivability; and the impact on the Navy's force structure.

The two versions of the MH-60 helicopter[Footnote 10] intended for use 
with LCS embody a number of these challenges. The helicopter is vital 
to each of the LCS's focused missions as well as some of the ship's 
inherent missions, such as maritime intercept operations. In order to 
operate a helicopter from LCS, a detachment of flight and maintenance 
personnel are required. The Navy's current helicopter detachments on 
surface warships each number at least 20 people. When combined with the 
ship's core mission crew, this number could exceed the capacity of LCS 
to house crews, thereby limiting the ability of LCS to operate other 
mission package systems and reducing the ship's operational 
effectiveness.

Additionally, the Navy's plans for buying and fielding MH-60s do not 
yet include the quantities needed for the numbers of follow-on LCS 
ships the Navy intends to buy. Since the helicopter is critical for 
LCS's concept of operations, the ship's operations will be 
significantly limited if the helicopters are not bought and made 
available. To do this, the Navy needs to plan for the numbers of 
helicopters needed, modify its procurement plans, obtain the funds, 
build the helicopters, deliver them, conduct operational evaluations, 
and train the crews.

The Navy recognizes these risk areas and has mitigation efforts 
underway in each area. For example, in the risk area of manning 
reduction, the Navy is using the "Sea Warrior" program to cross train 
sailors so that they are more able to multitask and perform a wider set 
of duties. The Navy is also conducting additional analysis to validate 
the maximum number of crewmembers needed and will make changes to crew 
accommodations if necessary. Further, the Navy is analyzing ways to 
reduce the size of helicopter detachments and is currently reevaluating 
its helicopter force structure and procurement plans to provide the MH- 
60s needed for LCS. In addition, the Navy has established an LCS risk 
management board to track and manage each of the risk areas as well as 
monitor the effectiveness of risk mitigation efforts. Table 4 lists the 
challenges for LCS and examples of Navy mitigation efforts.

Table 4: Challenges for LCS and Examples of Navy Mitigation Efforts:

Challenge: Manning; 
Description: Crew size of core crew and for mission packages could 
overcome capabilities of the ships as built; 
Examples of Navy mitigation efforts: 
* Top-down manning requirements analysis; 
* Early involvement with human systems integration and manning 
communities; 
* Industry integration response; 
* Navywide effort to analyze and change how sailors are trained in 
order to allow fewer sailors to monitor and maintain a greater number 
of the ship's systems.

Challenge: Training; 
Description: Need for innovative methods to cross- train personnel in 
order to achieve reduced manning levels; 
Examples of Navy mitigation efforts: 
* 13 Sailors identified and detailed to report to the LCS unit in 
Norfolk in January. The Naval Personnel Development Command will work 
with these sailors to mature and develop the "Revolution in Navy 
Training" approach for developing hybrid sailors; 

* Combined Navy-Industry team has developed a breakdown of specific 
skill sets (knowledge, skills, and abilities); 
* Training will occur at contractors' facilities for the Seaframe and 
mission packages. This will include hands on training and simulations 
in the intended environment.

Challenge: Sustainability/Logistics; 
Description: Infrastructure needed to sustain LCS while deployed, 
including storing and swapping mission packages; 
maintaining mission technologies while deployed; 
and viability of long-term unmanned vehicle operation; 
Examples of Navy mitigation efforts: 
* Navy is working with both seaframe contractors to classify personnel 
requirements in performing integrated logistics support tasks in final 
design; 
* Realigning current funding to support required integrated logistics 
support tasking and making this risk an award fee issue.

Challenge: Command, control, communications, computers, and 
intelligence; 
Description: General bandwidth, communication of data from unmanned 
vehicles to ship, and data links/communications with other fleet assets 
in support of LCS; 
Examples of Navy mitigation efforts: 
* Develop prototype mine, antisubmarine, and surface warfare mission 
planning applications; 
* Utilize unmanned vehicle control residual capability from technology 
demonstration; 
* LCS command and control iterative process team has been working 
directly with the two seaframe industry teams to insure that the 
seaframes include sufficient core communications systems/equipment to 
operate the Flight 0 mission packages.

Challenge: Survivability; 
Description: Ability of LCS to operate in hostile littoral 
environments, including structural and operational aspects; 
Examples of Navy mitigation efforts: 
* LCS seaframe and mission packages teams are working to established 
Navy survivability requirements.

Challenge: Force structure; 
Description: Integration of elements critical to LCS operations (e.g., 
adequate numbers of appropriate helicopters in the fleet); 
Examples of Navy mitigation efforts: 
* The Navy has conducted numerous force structure studies including the 
Analysis of Multiple Concepts and Navy headquarters ongoing force 
structure assessments.

Source: GAO from U.S. Navy sources.

[End of table]

None of these challenges are insurmountable, given enough time and 
other resources to address them. However, if the Navy is unsuccessful 
in mitigating the risk areas by the time the first Flight 0 ships are 
delivered, LCS may be unable to meet even the limited mission 
capability planned for Flight 0. The Navy plans for a period of about 
12 months between the time of delivery of the first Flight 0 ship and 
the start of construction for the first Flight 1 ship, provided the 
first Flight 0 ship is available on time. Further, only one mission 
package (mine warfare) will be available for testing and 
experimentation during that time. The last two Flight 0 ships will not 
be available before detailed design and construction of Flight 1 
begins. The second Flight 0 ship and the first mission packages for 
antisubmarine and surface warfare will be delivered just before 
detailed design and construction of Flight 1 begins. Delays caused by 
any of the risk areas discussed above might further reduce the already 
limited time to adequately experiment with one Flight 0 ship in order 
to integrate lessons learned into planning and designing for Flight 1.

Immaturity in Mission Package Technologies Could Decrease the 
Experimental and Operational Utility of Flight 0 Ships:

A number of the technologies chosen for the LCS mission packages are 
not mature, increasing the risk that the first ships will be of limited 
utility and not allow sufficient time for experimentation to influence 
design for follow-on ships. Our work has shown that when key 
technologies are immature at the start of development, programs are at 
higher risk of being unable to deliver on schedule and within estimated 
costs.[Footnote 11] The remaining technologies are mature although some 
may require alterations to operate from LCS. Other issues beyond 
technology maturity could prevent some systems from being available in 
time for the first ship. Some technologies still in development face 
challenges going to production, while other mature technologies may not 
be available for LCS due to other Navy priorities. Challenges remain 
for technologies included on the LCS seaframe, including those for 
communications, software, launch and recovery, and command and control 
of off-board systems. As a result, the first Flight 0 ships may not be 
able to provide even the limited amount of mission capability envisaged 
for them. These factors could also impair the Navy's ability to 
experiment with the Flight 0 ships and adequately gather and 
incorporate lessons learned into the designs for the Flight 1 ships.

In order to perform its focused missions of finding and neutralizing 
mines, submarines, and small boats in the littorals, LCS will deploy 
mission packages consisting of helicopters and unmanned vehicles with a 
variety of sensors and weapons. Each of the interchangeable mission 
packages is tailored to a specific mission and is optimized for 
operations in the littorals. By using a mix of manned and unmanned 
vehicles, program officials hope to increase the areas covered and 
decrease the time required by existing systems. The use of multiple 
mission packages is to be enabled by the design of the ship itself 
which will use a number of common connections or interfaces that will 
work regardless of the individual technologies or systems used in the 
mission packages.

In order to speed the development of the first LCS, the Navy planned 
for the mission packages to comprise technologies that are either 
already demonstrated in an operational environment and used by the 
Navy, and therefore fully mature, or very close to the end of the 
development cycle and near full maturity. However, in some cases the 
program office chose technologies that have not completed testing and 
are not considered mature. Some of these technologies will be delivered 
to LCS as prototypes or engineering development models and may not be 
fully mature. The program office has used an informed process in 
choosing which technologies to pursue for Flight 0, tracking the 
maturity of technologies and the plans for further development. Those 
technologies selected by the program that lack maturity are being 
monitored and decisions about their inclusion are made based on results 
of further testing. Once initial choices were made, the Navy used an 
independent panel of experts, consisting of Navy and industry 
technology experts, to reassess the maturity of technologies and the 
efforts needed for risk reduction. The assessment paid particular 
attention to technologies at low levels of readiness, such as the Non- 
Line-Of-Sight missile launching system (also referred to as NetFires) 
and the environment in which the technologies are to be used.

The first mission package to be developed will focus on mine warfare 
and will align with the delivery of the first ship in January 2007. The 
systems within this mission package contain both mature and immature 
technologies, although some mature technologies, like the remote mine- 
hunting vehicle, may need modifications to operate from LCS. Table 5 
shows the maturity and availability of mission package technologies for 
mine warfare, based on the Navy's current assessment. The first mission 
package is intended to be delivered with the first Flight 0 ship in 
fiscal year 2007.

Table 5: Mine Warfare Mission Package Status:

Mission: Vertical takeoff unmanned aerial vehicle & Coastal battlefield 
reconnaissance analysis system; 
Role: Detect; 
Mature: No; 
Available in FY 2007: Yes; 
Issues: Still in development.

Mission: Remote mine-hunting vehicle & AQS-20A sonar; 
Role: Detect; 
Mature: Yes; 
Available in FY 2007: Yes; 
Issues: May require alterations.

Mission: Battlefield preparation autonomous underwater vehicle; 
Role: Detect; 
Mature: Yes; 
Available in FY 2007: Yes; 
Issues: Has performance problems.

Mission: Sculpin undersea autonomous vehicle; 
Role: Detect; 
Mature: Yes; 
Available in FY 2007: Yes; 
Issues: N/A.

Mission: MH-60s helicopter; 
Role: [Empty]; 
Mature: No; 
Available in FY 2007: Unknown; 
Issues: Schedule risk.

Mission: 
* AQS-20A sonar; 
Role: Detect; 
Mature: Yes; 
Available in FY 2007: Unknown; 
Issues: Linked to helicopter.

Mission: 
* Airborne laser mine detection system; 
Role: Detect; 
Mature: Yes; 
Available in FY 2007: Unknown; 
Issues: Linked to helicopter. Only system for detecting floating mines 
in shallow water.

Mission: 
* Rapid airborne mine clearance system; 
Role: Neutralize; 
Mature: Yes; 
Available in FY 2007: Unknown; 
Issues: Linked to helicopter.

Mission: 
* Organic airborne surface influence sweep system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2007: Unknown; 
Issues: Linked to helicopter.

Mission: 
* Airborne mine neutralization system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2007: Unknown; 
Issues: Linked to helicopter.

Mission: Unmanned surface vehicle & influence sweep system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2007: Unknown; 
Issues: Still in development.

Mission: Navy mine clearance team; 
Role: Neutralize; 
Mature: Yes; 
Available in FY 2007: Yes; 
Issues: Still in development.

Source: GAO from U.S. Navy sources.

[End of table]

A number of critical mine warfare systems are not mature or will not be 
ready due to the unavailability or immaturity of subsystems. This could 
have a negative effect on LCS as the loss of certain technologies leads 
to a decrease in capabilities. The MH-60S helicopter is a key system 
for mine warfare employing technologies for both the detection and the 
neutralization of mines in shallow water. While the helicopter has 
proven its ability to detect mines, two of the technologies for 
neutralization lack maturity. Testing on neutralization technologies 
continues but is not expected to complete until after delivery of the 
first ship, limiting the ability of LCS to destroy sea based mines. One 
system which could fill the gap in this area, the unmanned surface 
vehicle, also lacks maturity in key systems and ultimately may not be 
available.

The first systems for antisubmarine and surface warfare packages of 
Spiral Alpha are scheduled to be available at the time the second 
Flight 0 ship is delivered in fiscal year 2008. Of these technologies, 
few are currently mature. Two of the systems used for detecting 
submarines, the unmanned surface vehicle and remote mine-hunting 
vehicle, lack maturity in key subsystems and will be delivered to LCS 
while still experimental. If these systems fail to meet requirements, 
LCS may have to depend on the MH-60R helicopter to find submarines. The 
MH-60R is an important system in both these missions, and while fully 
mature in the antisubmarine warfare configuration, it has not yet 
completed testing for surface warfare and is not expected to do so 
until September 2005. The helicopter has potential capability in both 
detecting and neutralizing surface targets, such as small boats, due to 
the types of sensors and weapons it carries. Tables 6 and 7 show the 
maturity and availability of mission package technologies for 
antisubmarine and surface warfare, respectively. These packages are 
scheduled to be delivered with the second Flight 0 ship in fiscal year 
2008.

Table 6: Antisubmarine Warfare Mission Package Status:

Mission package systems: Unmanned surface vehicle & sensor systems; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Still in development.

Mission package systems: Advanced deployable system; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: Remote mine-hunting vehicle & sensor systems; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Still in development.

Mission package systems: MH-60R helicopter; 
Role: [Empty]; 
Mature: Yes; 
Available in FY 2008: Unknown; 
Issues: Schedule risk.

Mission package systems: 
* Mk 54 torpedo; 
Role: Neutralize; 
Mature: Yes; 
Available in FY 2008: Unknown; 
Issues: Linked to helicopter.

Mission package systems: 
* Airborne low frequency sonar; 
Role: Detect; 
Mature: Yes; 
Available in FY 2008: Unknown; 
Issues: Linked to helicopter.

Mission package systems: 
* Sonobuoys; 
Role: Detect; 
Mature: Yes; 
Available in FY 2008: Unknown; 
Issues: Linked to helicopter.

Mission package systems: Torpedo countermeasures on ship; 
Role: Defense; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: [Empty].

Mission package systems: Vertical takeoff unmanned aerial vehicle & 
communications equipment; 
Role: Communications; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Still in development.

Source: GAO from U.S. Navy sources.

[End of table]

Table 7: Surface Warfare Mission Package Status:

Mission package systems: Unmanned surface vehicle & electro-optical 
infrared sensors; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Still in development.

Mission package systems: 
* 30mm gun system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: 
* NetFires Missile System; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: 
* Running gear entanglement system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: Vertical takeoff unmanned aerial vehicle & 
electro-optical infrared sensors; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: MH-60R helicopter & sensor systems; 
Role: Detect; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Schedule risk.

Mission package systems: 
* GAU 16 gun system; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Unknown; 
Issues: Linked to helicopter.

Mission package systems: 
* Hellfire; 
Role: Neutralize; 
Mature: Yes; 
Available in FY 2008: Unknown; 
Issues: Linked to helicopter.

Mission package systems: NetFires missile system on ship; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Mission package systems: 30mm gun system on ship; 
Role: Neutralize; 
Mature: No; 
Available in FY 2008: Yes; 
Issues: Still in development.

Source: GAO from U.S. Navy sources.

[End of table]

In addition to challenges posed by the lack of mature technologies, 
there may be other challenges in obtaining some mission package systems 
in time for the first ships. The unmanned surface vehicle, a system 
used in all three mission packages, is being developed through an 
advanced concept technology demonstration[Footnote 12] and does not yet 
have a planned production schedule. The current development program for 
the unmanned surface vessel ends in fiscal year 2005 and seeks only to 
prove the military utility of the vehicle. In order to procure the 
systems needed for LCS, a new program will have to be established to 
conclude development, finalize design and start production of vehicles.

Other technologies have planned production schedules but need to 
complete significant demonstrations and tests before they are able to 
deploy operationally. The vertical takeoff unmanned aerial vehicle, 
another system used in all mission packages, underwent a major 
redesign, and the first deliveries to LCS will not represent a final 
design. The remote mine-hunting vehicle only recently began development 
as an antisubmarine warfare platform and remains in development as an 
advanced concept technology demonstration. These factors could 
jeopardize the dates established for the delivery of the LCS mission 
packages and may ultimately affect the ability of LCS to execute many 
of the missions assigned to it.

Other technologies, while mature, may not be available to LCS in time 
for the ship's deployment due to other Navy priorities. For example, 
the MH-60 helicopters, in both the MH-60R and MH-60S configurations, 
are scheduled to complete testing in fiscal year 2007, but may not be 
fully available until fiscal year 2009, assuming the Navy makes them 
available for LCS, because of training requirements. This could have an 
impact on LCS capabilities in all missions. The MH-60S is a key system 
for mine warfare, and the lack of this helicopter results in the loss 
of some capability, in terms of detecting some mines, and limitations 
in the ability to neutralize others. While LCS will still be capable of 
detecting and destroying mines in littorals without the helicopter, it 
will do so more slowly, which minimizes operational effectiveness. If 
the MH-60R is unavailable, the ability to neutralize submarines from 
LCS is severely compromised as no other mission package system is 
planned to provide a neutralization capacity. Older, less capable, 
versions of the MH-60 helicopter can be used in this mission but 
changes would be needed in the ship's communications systems. The Navy 
acknowledges that no helicopters will be available for LCS operations 
until fiscal year 2009 and are working to align crew training schedules 
to permit operations with LCS.

Challenges also remain for systems on the LCS seaframe, including 
technologies for communications, software, launch and recovery, and 
command and control of off-board systems. Further tests of these 
systems are expected before ship installation.[Footnote 13]

In addition to limiting the operational capability of the Flight 0 
ships, technology maturity and availability issues could limit the time 
available for the Navy to adequately experiment with operation of the 
seaframe and mission packages and gather valuable lessons for 
incorporation into Flight 1 ships. Detailed design and construction of 
the first Flight 1 ship is currently scheduled to begin in fiscal year 
2008. Spiral Alpha mission packages for antisubmarine warfare and 
surface warfare are not scheduled for delivery to the Flight 0 ships 
until fiscal year 2008, just as detailed design and construction for 
Flight 1 is set to begin. If technology immaturity causes any of the 
mission packages systems to slip to later delivery dates, the 
opportunity to experiment and gather lessons learned from these systems 
aboard the Flight 0 ships would be lost, unless the time allowed for 
such experimentation is extended. If the helicopters are not available 
for operations until fiscal year 2009, input on the full impact of 
their operations could be lost as well.

Procurement Cost Estimates Are Uncertain:

The cost to procure the first flight of LCS ships remains uncertain, 
particularly regarding the mission packages. The basis of the 
procurement costs for the LCS seaframe appears to be more defined 
because the Navy has conducted a series of cost analyses to investigate 
the challenges in detailed design and construction. The Navy seeks to 
stabilize seaframe costs by establishing a $220 million cost target and 
working to meet this target by trading between capability and cost 
while assuring that seaframe performance meets threshold requirements. 
Nevertheless, seaframe costs could be affected by changes to ship 
design and materials that might be necessary as a result of changes to 
naval ship standards. As many of the systems for the mission packages 
lack maturity, cost data for these technologies are not as firm. Other 
mission package costs are not covered by LCS program cost analyses. For 
programs like LCS, an independent cost estimate by the Office of the 
Secretary of Defense normally provides additional confidence in program 
cost estimates, but such an estimate will not be done on LCS until 
Flight 1. In addition to issues with procurement costs, nonrecurring 
development costs for the LCS could expand, as systems both in the 
mission packages and the seaframe remain in development.

The Navy's procurement cost target for Flight 0 is about $1.5 billion 
(fiscal year 2005 dollars). The cost target for each of the four Flight 
0 ships is approximately $370 million. This includes $220 million for 
the seaframe and approximately $150 million for mission packages (the 
cost of six packages averaged over four ships).

The Navy currently estimates that the mission packages for Flight 0 
will cost approximately $548 million, which is approximately $137 
million for the six packages averaged over four ships. This is about 
$13 million below the mission package target. Table 8 shows the current 
cost estimates for the mission packages for Flight 0. The estimated 
cost for seaframe detailed design and construction is considered 
competition sensitive and is not discussed in detail in this report.

Table 8: Current Estimated Costs for Flight 0 Mission Packages:

Fiscal year 2005 dollars in millions: 

Item: Vertical takeoff unmanned aerial vehicle; 
Individual cost: $37.0; 
Quantity: 4; 
Total cost: $148.0.

Item: Advanced deployable system[A]; 
Individual cost: $12.3; 
Quantity: 1; 
Total cost: $12.3.

Item: Mine warfare package; 
Individual cost: $102.8; 
Quantity: 2; 
Total cost: $205.6.

Item: Antisubmarine warfare package; 
Individual cost: 67.0; 
Quantity: 2; 
Total cost: 134.0.

Item: Surface warfare package; 
Individual cost: $23.8; 
Quantity: 2; 
Total cost: $47.6.

Total for mission packages; 
Total cost: $547.5.

Source: GAO from Navy data.

[A] The advanced deployable system is used for detection of submarines.

[End of table]

The Navy has conducted a number of cost reviews for procurement of the 
LCS seaframe and mission packages to support decision making at key 
points in the program. One of the most detailed of these reviews took 
the form of a cost assessment used to support the program's initiation. 
In this assessment the program office analyzed cost data, provided by 
the contractor, to establish a preliminary cost and challenged some 
assumptions behind these costs. The Cost Analysis and Improvement Group 
of the Office of the Secretary of Defense also performed cost 
assessments for Flight 0. More recently, a cost estimate for procuring 
the seaframe and mission packages of Flight 0 was performed by the Navy 
and became the official program estimate. A cost estimate differs from 
an assessment in that it goes into greater depth in challenging 
assumptions behind costs provided by the contractors and may use 
different methodologies and assumptions to arrive at a final number. As 
a result, the program estimate may differ from the price provided by 
contractors and offers a more detailed cost analysis for decision 
making.

The basis of the procurement costs for the LCS seaframe appears to have 
become more defined over time as successive cost analyses have been 
developed to anticipate the challenges in detailed design and 
construction. Analyses included recommendations to add funds to 
mitigate changes to seaframe design as well as firm fixed price quotes 
for some materials. In addition, the Navy seeks to manage seaframe 
costs by establishing a $150 to $220 million cost range, which the Navy 
considers aggressive, and has been working to meet this range by 
trading between capability and cost while assuring that seaframe 
performance meets requirements. Any capabilities in the seaframe that 
exceed the requirements established by the Navy are considered trade 
space areas, in which less expensive systems may be substituted at the 
cost of lower performance. Each trade is analyzed for impact to cost 
and operational capability by a team of program officials and is fully 
vetted through the chain of command.

One factor that increases risk to seaframe cost estimates is applying 
the current changes in the naval vessel rules for design and 
construction of surface ships. The unconventional hull designs and 
materials used in both Flight 0 LCS designs reflect new types of ships 
the Navy has not hitherto built. Changes to the rules are occurring at 
the same time as development of the LCS. The process of meeting these 
rules could lead to changes in the designs and materials used. Such 
changes may increase uncertainty in seaframe procurement and life-cycle 
costs.

The costs for the first spiral of mission packages are less defined, as 
many of the technologies are not mature. For example, the unmanned 
surface vehicle remains in an advanced concept technology demonstration 
program into fiscal year 2005. This program seeks only to prove the 
military utility of the vehicle. Any cost data that emerges as a result 
of tests and construction of test vehicles does not accurately 
represent the final cost of the system and is thereby preliminary. The 
vehicle may also use different subsystems or have different 
capabilities when used on LCS. This would further change actual 
procurement costs.

Additional confidence in a program's costs is usually gained through an 
independent cost estimate done outside the Navy. According to a DOD 
acquisition instruction, an independent cost estimate should be 
completed as part of the process that normally authorizes the lead 
ship, referred to as the Milestone B decision.[Footnote 14] For 
programs like LCS, an independent group, like the Cost Analysis and 
Improvement Group, is required to perform such an estimate. While this 
group performed assessments of Flight 0 costs, it has not yet performed 
a cost estimate for LCS. On the LCS program, the Flight 0 ships are 
considered to be predecessors to the Milestone B decision. The 
Milestone B decision will authorize the first Flight 1 ship. The Navy 
considers this to be the point at which an independent estimate is 
required. An independent cost estimate is thus planned for 
authorization of Flight 1 in January of 2007. While DOD would not have 
been prevented from conducting an independent estimate for Flight 0, 
given the short time in which the Navy solicited and selected designs 
for Flight 0, it is unclear whether there was enough time to do so.

Other mission package costs are not covered by LCS program cost 
analyses but could have an effect on the broader Navy budget. For 
example, mission package costs do not include procurement costs for the 
MH-60R and MH-60S helicopters utilized in LCS operations. The Navy 
estimates that the procurement cost for each MH-60R is about $36 
million and the cost for each MH-60S is about $23 million. The number 
of helicopters acquired by the Navy is determined by the helicopter 
concept of operations, which has not yet been modified to reflect the 
deployment of LCS. Given the reliance of LCS mission packages on these 
platforms, costs for these systems, or number needed for operations, 
could increase.

The developmental nature of the mission package technologies may affect 
more than the procurement, or recurring, costs of LCS. Development and 
integration of technologies on many of the mission package systems is 
not complete. Testing for these systems will continue, in some cases, 
up to the delivery date of the mission packages. Should these tests not 
go as planned, or if more time and money is needed for integration and 
demonstration, development costs could rise. Since the development of 
mission package systems is only partially funded by LCS, the costs for 
continued development could spread to other programs. Alternately, the 
decision maybe made to reduce the quantities of certain technologies 
aboard LCS, as was the case with the Advanced Deployable system. Some 
seaframe technologies remain developmental as well, such as the launch 
and recovery systems. Unlike the mission packages, the LCS program 
office would assume any increase in development funding that occurs on 
seaframe systems.

Conclusions:

The Navy has embarked on a plan to construct four Flight 0 ships, 
complete development and procure multiple mission packages, experiment 
with the new ships, and commit to the construction of follow-on ships 
in a span of only four years. The Flight 1 and follow-on designs form 
the basis of a class of ships that may eventually total more than 50. 
At this point, we see three risks that could affect the success of the 
program.

First, because the Navy focused the surface warfare threat and 
requirements analysis exclusively on small boat swarms, the risks posed 
by larger surface threats when the LCS operates independently from 
nearby supporting U.S. forces have not yet been assessed.

Second is the availability of the MH-60 helicopter in light of its 
criticality to all LCS missions. Experimentation with the MH-60 will 
provide key information on mission performance, operations issues such 
as manning, and technology maturity. Thus, it is essential that the 
helicopters, equipped with the systems needed for LCS missions, be 
available for testing on the Flight 0 ships. In addition, if the 
quantities of MH-60s are not available for the Flight 1 ships the 
Navy's ability to deploy these ships operationally as intended, would 
be reduced. Making the MH-60s available requires meeting a number of 
challenges, including developing requirements, force structure 
planning, budgeting, delivering, and training air crews.

Third, the Navy intends to begin considering multiple designs for 
Flight 1 in fiscal year 2006 and to begin detailed design and 
construction of a single design in fiscal year 2008. By 2007, only one 
Flight 0 ship will be delivered, and only one mission package will be 
available, providing there are no delays for either ship or mission 
package. While maturing technologies and evaluating potential designs 
for Flight 1 while Flight 0 ships are being delivered could be 
beneficial, committing to a single design for follow-on ships before 
gaining the benefit of tests and experiments with the two Flight 0 
designs increases the risk to the Flight 1 design. The current schedule 
allows about 12 months for the Navy to conduct operational experiments 
to evaluate the first Flight 0 seaframe design; the mine warfare 
mission package; and the doctrinal, logistics, technology maturity and 
other operational challenges the Navy has identified before committing 
to production of follow-on ships. The Navy's schedule does not allow 
for operational experimentation with the other three ships or the 
antisubmarine or surface warfare mission packages before Flight 1 is 
begun. Setbacks in any of these areas further increases the risk that 
the Navy will not be able to sufficiently evaluate and experiment with 
Flight 0 ships and incorporate lessons learned into the design and 
construction of the Flight 1 ships.

Recommendations for Executive Action:

To help the Navy assess and mitigate operational, force structure, and 
technology risks associated with LCS, we are making the following three 
recommendations:

To determine whether surface threats larger than small boats do pose 
risks to the LCS when operating independently and to mitigate any risks 
the Navy subsequently identifies, we recommend that the Secretary of 
Defense direct the Secretary of the Navy to conduct an analysis of the 
effect of a surface threat larger than small boats on LCS operations 
and the impact on other naval forces in support of those operations.

To address challenges associated with integrating the MH-60 helicopter 
into LCS operations, we recommend that the Secretary of Defense direct 
that the Navy include in its ongoing evaluation of helicopter 
integration with LCS (1) evaluation of the numbers and budget impact of 
helicopters required to support future LCS ships and (2) examination of 
how to address manning, technology, and logistical challenges of 
operating the helicopters from LCS.

To allow the Navy to take full advantage of the technical and 
operational maturation of the Flight 0 ships before committing to the 
much larger purchases of follow-on ships, we recommend that the 
Secretary of Defense direct the Navy to revise its acquisition strategy 
to ensure that it has sufficiently experimented with both Flight 0 ship 
designs, captured lessons learned from Flight 0 operations with more 
than one of the mission packages, and mitigated operational and 
technology risks before selection of the design for an award of a 
detailed design and construction contract for Flight 1 is authorized.

Agency Comments and Our Review:

In written comments on a draft of this report, DOD generally agreed 
with the intent of our recommendations. DOD discussed steps it is 
currently taking as well as actions it plans to take to address these 
recommendations.

In response to our recommendation that the Navy analyze the effect of a 
larger surface threat on LCS operations, DOD indicated that, in 
addition to efforts it already has underway to analyze elements of the 
threats facing LCS, the Navy will assess the impact of larger surface 
threats on LCS as part of the capabilities development process for 
Flight 1. Using the analyses required in this process should help the 
Navy clarify the extent to which a larger surface threat poses a risk 
to LCS operations.

In commenting on its plans to address helicopters' needs and 
challenges, DOD indicated that it is currently assessing the helicopter 
force structure including both manned and unmanned aerial vehicles. 
While this may clarify the Navy's helicopter force structure 
requirements, we continue to believe that due to the importance of 
helicopters to LCS operations and the numbers of LCS the Navy plans to 
acquire, the Navy should also analyze the budgetary impact of potential 
helicopter force structure changes.

In response to our recommendation that the Navy revise its acquisition 
strategy to ensure time to experiment with Flight 0 designs, DOD stated 
that, before award of Flight 1 contracts, it will review the 
acquisition strategy to ensure the strategy adequately provides for 
experimentation, lessons learned, and risk mitigation. DOD stated that 
it is balancing the acquisition risks with the risk of delaying closure 
of warfighting gaps that LCS will fill. It also stated that mission 
package systems will potentially be spiraled with a different cycle 
time than the historically more stable hull and systems that comprise 
the seaframe. We believe the separation of development spirals for the 
mission packages and seaframe has merit. However, decisions leading to 
the award of a detailed design contract for the Flight 1 seaframe must 
go beyond technology risks. Because the Navy plans to begin design of 
the Flight 1 seaframe with a new development effort and competition, it 
is important to gain experience with the two Flight 0 seaframe designs 
that are being acquired so that the benefits of this experimentation 
can be realized in the design and development of a new seaframe. 
Experimentation with Flight 0 in terms of basic mission performance, 
swapping mission packages, actual manning demands, and operations with 
multiple LCS are all factors that could have a significant effect on 
the Flight 1 ship design.

DOD also noted that its plan for acquiring LCS provides for multiple 
flights. Under this strategy, DOD would have more opportunities beyond 
the fiscal year 2008 Flight 1 decision to upgrade mission packages and 
seaframes as the 50 or so remaining ships are bought. We have made 
changes in the report to reflect this strategy. However, we do not 
believe it lessens the value of incorporating experience from Flight 0 
operations into the design for Flight 1.

DOD's written comments are included in their entirety in appendix II.

We are sending copies of this report to the appropriate congressional 
committees, the Secretary of Defense, and the Secretary of the Navy. We 
will also make copies available to others upon request. In addition, 
the report will be available at no charge on the GAO Web site at 
http://www.gao.gov.

If you or your staff have any questions concerning this report, please 
contact Paul Francis at (202) 512-2811; or Karen Zuckerstein, Assistant 
Director, at (202) 512-6785. Key staff members that contributed to this 
report are listed in appendix III.

Signed by: 

Paul L. Francis: 
Director, Acquisition and Sourcing Management:

Signed by: 

Janet St. Laurent: 
Director, Defense Capabilities and Management:

[End of section]

Appendix I: Scope and Methodology:

To assess the basis of the LCS requirements and the concept of 
operations, we obtained and analyzed Navy wargames and operational 
plans, requirements documents, and other sources used by the Navy to 
identify capability gaps in the littoral waters. We conducted our own 
analysis of all critical concept, requirements, and acquisition 
documents required as part of the Joint Capabilities Integration and 
Development system to determine the extent to which the Navy (1) 
developed specific requirements to address capability gaps and examined 
materiel and nonmateriel solutions to meet those requirements; and (2) 
developed a concept of operations that addressed each of the identified 
requirements as well as critical doctrinal, logistical, and operational 
considerations. We compared the sources of the requirements for the 
LCS, such as analyses of military operations based on specific 
scenarios and threat assessments to the final validated requirements 
document (Capabilities Development Document), and highlighted each 
capability gap. We identified the capability gaps in the Navy's 
functional analysis for each of the warfare missions--mine warfare, 
antisubmarine warfare, and surface warfare. This included looking at 
the Navy's standards that were used to measure how well the current and 
programmed joint forces could mitigate the warfare threats in the 
littorals during a major combat operation. We then reviewed the 
materiel and nonmateriel solutions identified by the Navy that could be 
used as alternative solutions for mitigating the gaps. We also 
conducted a comparative analysis of the Initial Capabilities Document 
with the validated requirements in the Capabilities Development 
Document to highlight additional gaps. We also compared the 
requirements, as developed in the CDD and the Preliminary Design 
Interim Requirements Document to the LCS operating concepts and 
capabilities, as developed in the Navy's two versions of the concept of 
operations.

To assess the Navy's progress in defining the concept of operations we 
used a gap analysis, similar to the one used for the requirements, to 
trace the extent to which the concept of operations were developed. GAO 
compared the LCS concept of operations to the ship's requirements 
(specifically the Capabilities Development Document) and the identified 
capability gaps to determine if the LCS concept of operations fulfilled 
the requirements. We also discussed with Navy officials the extent to 
which they included doctrinal and operational challenges and the Navy's 
assessment of where the risks are stemming from these challenges and 
their mitigation efforts.

To assess the progress of technology development in LCS mission 
packages, we reviewed the basis of the Navy's estimation of technology 
readiness and plans to bring these technologies to full maturity. As a 
part of this assessment we analyzed the Technology Readiness Assessment 
performed by the Navy and reviewed development and testing plans 
developed by the program offices. As a measure of technology maturity 
we utilized Technology Readiness Levels, the same metric used by the 
Navy in the Technology Readiness Assessment. The standard we used for 
assessing technology maturity is the demonstration of form, fit, and 
function in an operational environment. This standard is based on 
defined technology readiness levels developed by the National 
Aeronautic and Space Administration and adopted by DOD.[Footnote 15]

Table 9: Technology Readiness Levels and Their Definitions:

Technology readiness level (TRL): 1. Basic principles observed and 
reported; 
Description: Lowest level of technology readiness. Scientific research 
begins to be translated into applied research and development. Examples 
might include paper studies of a technology's basic properties; 
Hardware software: None (paper studies and analysis); 
Demonstration environment: None.

Technology readiness level (TRL): 2. Technology concept and/or 
application formulated; 
Description: Invention begins. Once basic principles are observed, 
practical applications can be invented. The application is speculative 
and there may be no proof or detailed analysis to support the 
assumption. Examples are still limited to paper studies; 
Hardware software: None (paper studies and analysis); 
Demonstration environment: None.

Technology readiness level (TRL): 3. Analytical and experimental 
critical function and/or characteristic proof of concept; 
Description: Active research and development is initiated. This 
includes analytical studies and laboratory studies to physically 
validate analytical predictions of separate elements of the technology. 
Examples include components that are not yet integrated or 
representative; 
Hardware software: Analytical studies and demonstration of nonscale 
individual components (pieces of subsystem); 
Demonstration environment: Lab.

Technology readiness level (TRL): 4. Component and/or breadboard. 
Validation in laboratory environment; 
Description: Basic technological components are integrated to establish 
that the pieces will work together. This is relatively "low fidelity" 
compared to the eventual system; 
Examples include integration of "ad hoc" hardware in a laboratory; 
Hardware software: Low fidelity breadboard; Integration of nonscale 
components to show pieces will work together; Not fully functional or 
form or fit but representative of technically feasible approach 
suitable for flight articles; 
Demonstration environment: Lab.

Technology readiness level (TRL): 5. Component and/or breadboard 
validation in relevant environment; 
Description: Fidelity of breadboard technology increases significantly. 
The basic technological components are integrated with reasonably 
realistic supporting elements so that the technology can be tested in a 
simulated environment; Examples include "high fidelity" laboratory 
integration of components; 
Hardware software: High fidelity breadboard; Functionally equivalent 
but not necessarily form and/or fit (size weight, materials, etc.). 
Should be approaching appropriate scale. May include integration of 
several components with reasonably realistic support 
elements/subsystems to demonstrate functionality; 
Demonstration environment: Lab demonstrating functionality but not form 
and fit. May include flight demonstrating breadboard in surrogate 
aircraft. Technology ready for detailed design studies.

Technology readiness level (TRL): 6. System/subsystem model or 
prototype demonstration in a relevant environment; 
Description: Representative model or prototype system, which is well 
beyond the breadboard tested for TRL 5, is tested in a relevant 
environment. Represents a major step up in a technology's demonstrated 
readiness. Examples include testing a prototype in a high fidelity 
laboratory environment or in simulated operational environment; 
Hardware software: Prototype--Should be very close to form, fit and 
function. Probably includes the integration of many new components and 
realistic supporting elements/subsystems if needed to demonstrate full 
functionality of the subsystem; 
Demonstration environment: High fidelity lab demonstration or 
limited/restricted flight demonstration for a relevant environment. 
Integration of technology is well defined.

Technology readiness level (TRL): 7. System prototype demonstration in 
an operational environment; 
Description: Prototype near or at planned operational system. 
Represents a major step up from TRL 6, requiring the demonstration of 
an actual system prototype in an operational environment, such as in an 
aircraft, vehicle, or space. Examples include testing the prototype in 
a test bed aircraft; 
Hardware software: Prototype. Should be form, fit, and function 
integrated with other key supporting elements/subsystems to demonstrate 
full functionality of subsystem; 
Demonstration environment: Flight demonstration in representative 
operational environment such as flying test bed or demonstrator 
aircraft. Technology is well substantiated with test data.

Technology readiness level (TRL): 8. Actual system completed and 
"flight qualified" through test and demonstration; 
Description: Technology has been proven to work in its final form and 
under expected conditions. In almost all cases, this TRL represents the 
end of true system development; Examples include developmental test and 
evaluation of the system in its intended weapon system to determine if 
it meets design specifications; 
Hardware software: Flight qualified hardware; 
Demonstration environment: Developmental test and evaluation in the 
actual system application.

Technology readiness level (TRL): 9. Actual system "flight proven" 
through successful mission operations; 
Description: Actual application of the technology in its final form and 
under mission conditions, such as those encountered in operational test 
and evaluation. In almost all cases, this is the end of the last "bug 
fixing" aspects of true system development. Examples include using the 
system under operational mission conditions; 
Hardware software: Actual system in final form; 
Demonstration environment: Operational test and evaluation in 
operational mission conditions.

Source: GAO and its analysis of National Aeronautics and Space 
Administration data.

[End of table]

Our analysis was supplemented by interviews with officials from the LCS 
program offices and other Navy programs supporting the mission 
packages. Our audit focused on technologies for Flight 0, as 
technologies for Flight 1 have not been selected.

To assess the basis of LCS costs we reviewed the cost analyses prepared 
by the contractors and the LCS program office. We analyzed the basis of 
costs for design and construction of the seaframe as well as the 
development and procurement costs of mission packages for Flight 0. Our 
analysis was supplemented by interviews with the program offices and 
contractors involved in LCS. Costs for operation of Flight 0 and 
procurement of Flight 1 have not been estimated. Details of the costs 
and technologies for the seaframe are sensitive, due to the ongoing 
competition. We therefore do not discuss these at length.

To address our objectives, we visited and interviewed officials from 
Navy headquarters' surface warfare requirements office; LCS program 
offices; mine warfare program office; the MH-60 program office; the 
Unmanned Aerial Vehicles program office; the Naval Surface Warfare 
Center, Dahlgren Division; the Naval Undersea Warfare Center; the Naval 
War College; and the Navy Warfare Development Command. We also 
interviewed officials from the Office of the Secretary of Defense's 
Program Analysis and Evaluation division, General Dynamics, and 
Lockheed Martin.

We conducted our review from July 2004 through December 2004 in 
accordance with generally accepted government auditing standards.

[End of section]

Appendix II: Comments from the Department of Defense:

OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3000:

Mr. Paul L. Francis:
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office:
441 G Street, NW: 
Washington, DC 20548:

Dear Mr. Francis:

This is the Department of Defense (DOD) response to the Government 
Accountability Office (GAO) draft report, "DEFENSE ACQUISITIONS: Plans 
Should Allow Enough Time to Demonstrate Capability of First Littoral 
Combat Ships," dated January 21, 2005 (GAO Code 120344/GAO-05-255).

The Department has reviewed the draft report and partially concurs with 
the three recommendations. I am enclosing specific DoD comments that 
address each of the recommendations.

We appreciate the opportunity to comment on the draft report.

Sincerely,

Signed for: 

Glenn F. Lamartin: 
Director: 
Defense Systems:

Enclosure: As stated:

GAO DRAFT REPORT - DATED JANUARY 21, 2005 GAO CODE 120344/GAO-05-255:

"DEFENSE ACQUISITIONS: PLANS SHOULD ALLOW ENOUGH TIME TO DEMONSTRATE 
CAPABILITY OF FIRST LITTORAL COMBAT SHIPS"

DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
direct the Secretary of the Navy to conduct an analysis of the effect 
of a surface threat larger than small boats on Littoral Combat Ships 
(LCS) operations and the impact on other naval forces in support of 
those operations. (p. 36/GAO Draft Report):

DOD RESPONSE: Partially Concur.

The GAO draft report identifies the "surface threat larger than small 
boats" as missile-armed patrol boats and frigates that might have 
medium-caliber guns, torpedoes, and anti-ship missiles. The GAO draft 
report states the Navy's analysis of LCS requirements does not consider 
these.

The Navy either has completed or is in the process of conducting some 
of the analysis the GAO recommends. Specifically, the Navy has 
completed an analysis of anti-ship cruise missile threats to LCS. The 
torpedo defense analysis is complete for Flight 0 and is ongoing for 
Flight 1. For the remaining areas, the Navy will assess capabilities 
against larger surface targets in the littoral as part of the LCS 
Flight 1 Capabilities Development Document generation.

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
direct that the Navy include in its ongoing evaluation of helicopter 
integration with LCS: (1) an evaluation of the numbers and budget 
impact of helicopters required to support future LCS ships, and (2) an 
examination of how to address manning, technology, and logistical 
challenges of operating the helicopters from LCS. (p. 36/GAO Draft 
Report):

DOD RESPONSE:

Part 1. Partially Concur. A review of helicopter force structure is 
underway, taking into account several recent changes, including the 
introduction of LCS and unmanned aerial vehicles.

Part 2. Concur. Ongoing Navy studies are addressing manning, 
technology, and logistical challenges of operating helicopters and 
unmanned aerial vehicles from LCS. These comprehensive, integrated 
supportability and engineering studies span LCS, mission module, MH-60, 
and Vertical Takeoff Unmanned Aerial Vehicle program activities in an 
effort to define solutions that meet an optimal, total capability need 
versus system-specific needs. These studies also maximize opportunities 
to leverage technology development and innovative supportability 
concepts introduced by other aviation-capable ship programs. The 
completed study will offer manning alternatives and identify training 
tracks for the aviation detachment.

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
direct the Navy to revise its acquisition strategy to ensure that it 
has sufficiently experimented with both Flight 0 ship designs, captured 
lessons learned from Flight 0 operations with more than one of the 
mission packages, and mitigated operational and technology risks before 
selection of the design for an award of the detailed design and 
construction contract for Flight 1 is authorized. (p. 36/GAO Draft 
Report):

DOD RESPONSE: Partially Concur.

The Department concurs with the intent of this recommendation and will 
review the acquisition strategy before award of Flight 1 contracts to 
ensure that the transition from Flight 0 to Flight 1 adequately 
provides for experimentation, lessons learned, and risk mitigation. 
However, the LCS program entails risk by design. The Department 
balances the program acquisition risks with the risk of delaying 
closure of the warfighting gaps that LCS will fill. The Navy intends 
for LCS Flight 0 to deliver an immediate capability to the fleet to 
address critical littoral anti-access capability gaps and to provide 
risk reduction for follow-on flights.

The Department previously has identified the risks discussed in this 
report and actively is managing the risks and developing appropriate 
mitigation plans. The inherent modularity of the LCS concept mitigates 
the current schedule risks, especially for the mission packages. 
Mission package systems will potentially be spiraled with a different 
cycle time than the historically more stable hull, mechanical, and 
electrical systems of the seaframe. The primary risks identified by GAO 
reside in the mission systems. The acquisition of the seaframe has a 
more manageable risk. Acquisition of new spirals for each of the 
mission packages will proceed at the pace optimal to their technical 
maturity to provide warfighting improvements over time.

The evolutionary development plan for LCS provides for multiple 
flights. The Department does not anticipate the Flight 1 execution 
decision in FY08 will be for an extended 50+ ship run as suggested in 
the report, but will be limited to an optimal flight size before the 
Department initiates a flight upgrade with its associated requirements 
definition process and acquisition milestones. The Navy plans to 
acquire 50+ LCS, but the acquisition strategy is designed to allow the 
Department to buy the optimum seaframe and mission packages at every 
point along the acquisition timeline. We will clarify this in the 
acquisition strategy update. 

[End of section]

Appendix III: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Paul L. Francis (202) 512-2811; 
Janet A. St. Laurent (202) 512-4402; 
Karen S. Zuckerstein (202) 512-6785:

Staff Acknowledgments:

In addition to those named above, Richard G. Payne, Jerome A. Brown, J. 
Kristopher Keener, Joseph W. Kirschbaum, James C. Lawson, Jodie M. 
Sandel, Angela D. Thomas, Roderick W. Rodgers, and Bethann E. Ritter 
made key contributions to this report.

FOOTNOTES

[1] S. Rep. No. 108-46, at 179-180 (2003).

[2] Pub. L. No. 108-136 (2003).

[3] H.R. Rep. No. 108-491, at 184-185 (2004).

[4] Pub. L. No. 108-375 (2004).

[5] DOD generally refers to these considerations as doctrine, 
operations, training, materiel, leadership, personnel, and facilities 
(DOTMLPF).

[6] The Flight 1 acquisition strategy is under review and Navy 
officials indicate that no options have been excluded, including the 
selection of more than one design for Flight 1.

[7] Department of Defense, Instruction No. 5000.2, Operation of the 
Defense Acquisition System, May 12, 2003 and Chairman of the Joint 
Chiefs of Staff, Instruction 3170.01D, Joint Capabilities Integration 
and Development System, March 12, 2004.

[8] GAO, Navy Acquisitions: Improved Littoral War-Fighting Capabilities 
Needed, GAO-01-493 (Washington, D.C.: May 2001).

[9] This is referred to as the Joint Capabilities Integration and 
Development System, which is meant to identify joint capabilities that 
allow joint forces to meet the full range of future military 
challenges. The current version of this guidance is dated March 12, 
2004.

[10] MH-60R and MH-60S.

[11] The standard we used for assessing technology maturity is the 
demonstration of form, fit, and function in an operational environment. 
This standard is based on defined technology readiness levels developed 
by NASA and adopted by DOD. See GAO, Best Practices: Using A Knowledge- 
Based Approach to Improve Weapon Acquisition, GAO-04-386SP (Washington, 
D.C.: January 2004). A DOD acquisition instruction also states that 
technology should be demonstrated, preferably in an operational 
environment, to be considered mature enough for product development in 
systems integration. See Department of Defense, Instruction No. 5000.2, 
Operation of the Defense Acquisition System, § 3.7.2.2, May 12, 2003. 
Technology maturity levels are discussed further in GAO, Best 
Practices: Better Management of Technology Development Can Improve 
Weapon System Outcomes, GAO/NSIAD-99-162 (Washington, D.C.: July 30, 
1999). 

[12] Advanced concept technology demonstrations are DOD efforts to 
provide mature or maturing technology prototypes to the warfighter in 
order to test concepts and applicability of the technology and evaluate 
the extent to which further acquisition is needed. 

[13] The exact nature of the seaframe technologies is considered 
competition sensitive and is not discussed in detail in this report.

[14] Department of Defense, Instruction No. 5000.2, Operation of the 
Defense Acquisition System, § 3.7.1.2, May 12, 2003. The statutory 
basis for this requirement is 10 U.S.C. § 2434, which provides that the 
Secretary of Defense may not approve the system development and 
demonstration or the production and deployment of a major defense 
acquisition program unless the Secretary considers an independent 
estimate of the full lifecycle cost of the program.

[15] See GAO, Best Practices: Using A Knowledge-Based Approach to 
Improve Weapon Acquisition, GAO-04-386SP (Washington, D.C.: January 
2004); GAO, Defense Acquisitions: Assessments of Major Weapons 
Programs, GAO-04-248 (Washington, D.C.: March 2004) and Best Practices: 
Better Management of Technology Development Can Improve Weapon System 
Outcomes, GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999); and 
Department of Defense, Instruction No. 5000.2, Operation of the Defense 
Acquisition System, § 3.7.2.2, May 12, 2003; and Defense Acquisition 
Guidebook, § 10.5.2, December 2004.

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