Defense Acquisitions: Navy's Ability to Overcome Challenges Facing the Littoral Combat Ship Will Determine Eventual Capabilities

The department considers this recommendation closed, and has stated that both LCS seaframe designs are now stable, citing the minimal change activity to date for LCS 3 and LCS 4 and the continued availability of change order budgets for those ships. However, the Navy deferred several changes affecting key ship systems until post-delivery for LCS 3 and LCS 4 which has not yet concluded, meaning that any additional changes required may not yet be known. Further, as the Navy continues to address technical deficiencies affecting the lead ships -- generally through design changes -- the scope of deferred work for follow-on ships can reasonably be expected to grow. Finally, recent Navy announcements regarding possible increases to manning and the number of berths on the ships indicate that further redesign is forthcoming. Until the scope of these changes are fully identified -- and priced into LCS contracts -- the department cannot be fully confident that its budgets for follow-on ships are sufficient to offset the cost increases associated with performing work out of sequence. LCS 5 and LCS 6 began fabrication in August 2011, and LCS 7 and LCS 8, awarded in March 2011, began fabrication in November 2012 and June 2013, respectively. These fabrication start dates preceded completion of design changes for the first 4 seaframes.

Since we issued this report, the Navy has significantly altered its planned acquisition strategy and no longer intends to award new block buy contracts in 2016. The Navy now plans to award contracts--with the acquisition strategy to be determined--for 3 ships in fiscal year 2017 and 3 ships in fiscal year 2018, and that it will award contracts for up to 20 of a new modified LCS in 2019. This revised approach alters the timing of our recommendation as written, but does not change our intention, which is to ensure that the Navy does not continue to commit to additional ships until it demonstrates that it has attained some level of knowledge related to, among other thing, operational testing of at least one of the mission packages on each variant. The Navy completed initial operational test and evaluation of the Surface Warfare mission package on the Freedom variant in 2015. However, initial operational test and evaluation of the Mine Countermeasures mission package on the Independence variant continues to be delayed, with testing currently planned for Fall 2015. At the time of this update, Congress was considering language to restrict LCS and Frigate funds in the FY 2016 National Defense Authorization Act (NDAA) until the Navy submits, among other things, an acquisition strategy for LCS 25-32. Similarly, the National Defense Appropriations Act for 2016 recommends an approximate $104.5 million reduction in the Mine Countermeasures mission modules.