Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue Amid Substantial Unknowns about Capabilities, Use, and Cost

What GAO Found

GAO found that the Navy has made progress in addressing some of the early design and construction problems on the LCS 1 and LCS 2 seaframes, and quality defects and unit costs are declining, now that the seaframes are in steady production. Based on projected learning curves, shipyard performance can be expected to continue to improve over time. This expected progress could, however, be disrupted, as the Navy is considering potentially significant seaframe design changes. For example, the Navy is currently studying changes to increase the commonality of systems and equipment between the two ship variants, primarily with regard to the ships' combat management systems, and add new capabilities. In addition, the Navy still has outstanding gaps in its knowledge about how the unique designs of the two variants will perform in certain conditions. The lead ship of the Freedom class is currently on an extended deployment to Southeast Asia, and the Navy views this as an important opportunity to demonstrate some of the ship's capabilities and allow the crew to obtain first-hand experience with operations. Yet, developmental testing of the seaframes is ongoing, and neither variant has completed shock and survivability testing, which will demonstrate that the ship designs can safely absorb and control damage. Importantly, operational testing of the LCS with its mission modules is several years away, which I will discuss later. Late discoveries of problems while the seaframes continue to be constructed could lead to further design changes.

The Navy continues to buy early increments of LCS mission packages before (1) defining requirements and cost, schedule, and performance goals for each increment, as currently required by DOD policy and (2) completing developmental testing, which to date has identified problems with system performance. This evolutionary acquisition strategy, which delivers improving levels of capability over several increments, offers warfighters improved capability as it is available. However, the requirements for the increments have not yet been defined, and the increments will provide performance below the Navy's minimum needs for years to come. In addition, the Navy does not plan to demonstrate that the MCM and SUW packages can meet minimum--termed "threshold"--requirements until their final increments are fielded in 2017 and 2019, respectively. By that time, the Navy will have already procured more than 24 MCM and SUW mission packages. Further, developmental testing to date--especially for the systems comprising the MCM package--has shown performance problems. Internal Navy studies and wargames have also raised concerns with the overall effectiveness of each mission package based on inherent seaframe or mission module limitations.

Why GAO Did This Study

This testimony discusses issues related to the Department of the Navy's Littoral Combat Ship (LCS)--a program framed by a revolutionary approach to shipbuilding acquisition and naval operations. The LCS consists of the ship--called a seaframe--and mission modules, which, when integrated with the seaframe and supplemented with aviation support, provide mission capability. Unlike other Navy surface combatants, which generally have fixed mission systems, LCS is intended to be reconfigurable to perform three primary missions: surface warfare (SUW), mine countermeasures (MCM), and anti-submarine warfare (ASW). These modules are intended to give the Navy flexibility to change equipment in the field to meet different mission needs and incorporate new technology to address emerging threats. Further, LCS is envisioned to have a smaller crew by relying instead on shore-based support for its administrative and maintenance needs. The total estimated acquisition cost of the LCS program is over $40 billion in 2010 dollars. In total, the Navy plans to buy 52 seaframes and 64 mission packages. GAO has previously reported on a number of challenges related to the LCS program, including cost growth, schedule delays, and problems with delivering intended capabilities. GAO's remarks today are based on the most recent report, which is being released at this hearing, titled Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue Amid Substantial Unknowns about Capabilities, Use, and Cost.

The Navy's acquisition strategy for LCS seaframes has changed several times over the past decade. The original plan was to fund one or two initial ships, and then spend time experimenting with the seaframes and overall LCS concept before ultimately selecting one seaframe design. The Navy has accepted delivery of the first three seaframes and has spent several years completing various test and maintenance events on the first two--USS Freedom (LCS 1) and USS Independence (LCS 2). USS Fort Worth (LCS 3) was delivered in June 2012. During this time, GAO and others reported on a number of problems with the seaframes and their equipment, as well as challenges related to the development of mission module technologies.

For questions about this statement, please contact Paul Francis at (202) 512-4841, or at francisp@gao.gov.