Navy Won't Disclose Cost Overruns for USS Milwaukee
(Source: Project On Government Oversight; issued March 16, 2017)
As the Trump administration proposes to ramp up defense spending and expand the U.S. Navy’s armada, the long-term future of a combat shipbuilding program in Marinette ultimately may hinge on a combination of those ships’ cost-efficiency and performance.

But in a new report that examines Navy shipbuilding, the Government Accountability Office has deleted cost overrun data on the Marinette-built USS Milwaukee, launched in 2014, as well as the USS Jackson, also launched that year but built in Mobile, Ala.

The GAO said it withheld the data from the public at the request of the Defense Department, which deemed it “sensitive but unclassified information.”

“We always ask the Department of Defense to go through our information and ask if there is anything that should not be publicly released. They did that in this case,” said Michele Mackin, a GAO official familiar with the report.

“We did not argue or push back. It’s not our call,” she said. “We only asked for their rationale. We wouldn’t take something out (of a report) because it was embarrassing or they didn’t want it to be seen by the public. But in this case, we understood their point.”

The USS Milwaukee and Jackson were the fifth and sixth vessels produced in the Navy’s littoral combat ship program, which so far has been dogged by high costs, mechanical breakdowns and lackluster performance. Littoral ships are designed to perform in shallow, near-shore waters.

Sen. John McCain (R-Ariz.), a critic of the program, said in a December hearing that taxpayers have paid for, and are still paying for, 26 ships that have demonstrated next to no combat capability.

“The littoral combat ship, or LCS, is an unfortunate yet all too common example of defense acquisition gone awry,” said McCain, chairman of the Senate Committee on Armed Services.

“Taxpayers have paid a heavy price for these mistakes. The LCS was initially expected to cost $220 million per ship. But the cost of each ship has more than doubled to $478 million.”

The GAO report declined to make public the cost overrun information for USS Milwaukee, although it said increases for other Navy ships ranged up to nearly 45%.

The agency said it wouldn’t release the information on the littoral vessels because it could harm price negotiations for some of the next ships in the program.

The “percent difference” for the Milwaukee and Jackson was “above target cost” for each ship, the GAO said, while not providing numbers.

Congress and the GAO have access to the data for official purposes, but the public does not, said Navy Capt. Thurraya Kent, a public affairs officer who works with the Pentagon.

“We are in an ongoing competition for fiscal-year 2017 ships. So that information is not releasable,” Kent said.

Objecting to the secrecy about LCS overruns is the Project on Government Oversight, a Washington, D.C., group that for decades has exposed wasteful military spending on items such as a $7,600 coffee maker and a $435 hammer.

Taxpayers are footing the bill for the littoral ships, and they have a right to know, said Mandy Smithberger, a director for the project’s military reform initiative. Also in question is how well the Navy has managed billions of dollars in the shipbuilding program, for years racking up costs and paying for repairs when the ships were delivered with defects.

“Unfortunately, we see this as a textbook example of ineffective congressional oversight,” she said.

In December 2015, the USS Milwaukee broke down at sea and had to be towed more than 40 miles to a Navy base near Norfolk, Va. Then, in January 2016, the USS Fort Worth had a major mechanical failure in Singapore, with repairs estimated in the millions of dollars.

The USS Freedom, the first LCS built in Marinette, has suffered multiple setbacks since its 2008 commissioning, including a 6-inch crack in the hull, a failed gas turbine, propulsion system problems, and a leak that caused flooding in the vessel.

The GAO wrote in December that the LCS “raises a basic oversight question. Does a program that costs twice as much but delivers less capability than planned still warrant an additional investment of nearly $14 billion?”

Still, the Navy says it believes in the small, fast vessels powered by jet propulsion.

“What is getting lost in the discourse is the real capability that LCS provides to the fleet,” Navy Lt. Kaitlin Smith wrote in a January article for the Center for Maritime International Security.

“LCS was … envisioned as a platform for ‘mobility’ related missions like support for Special Operations Forces, maritime interception operations, force protection, humanitarian assistance, logistics, medical support and non-combatant evacuation operations. Assigning these missions to LCS frees up multi-mission destroyers and cruisers for high-end combat operations,” Smith wrote.

Wisconsin’s congressional delegation has supported the shipbuilding program, which has brought 2,200 jobs to the Fincantieri shipyard in Marinette and supports a total of about 12,500 jobs at the shipyard and suppliers in 37 states.

Members of the delegation — including U.S. Reps. Paul Ryan, Mike Gallagher, Sean Duffy and Sens. Tammy Baldwin and Ron Johnson — did not respond to Milwaukee Journal Sentinel requests for comment about the GAO’s refusal to disclose the cost overruns.

Currently, nine of the ships are in various stages of production at Marinette. The work is expected to last through at least 2021.

Altogether, the Navy wants 52 of the ships, including 12 described as “frigates” that are expected to be bigger and better armed than the current designs.

Lockheed Martin Corp., the defense contractor for the LCS program in Marinette, says it’s confident in the progress made to improve the ships and bring costs down.

Last spring, Lockheed was awarded U.S. Navy funding of up to $564 million to build an LCS that's to be delivered in 2020.

“We are executing the program within the Navy’s budget,” Lockheed Martin spokesman John Torrisi said in a statement to the Journal Sentinel.

President Donald Trump and Defense Secretary Jim Mattis haven’t made public their views on the littoral combat ships, but Trump has said he supports a bigger, stronger Navy.

“The Trump plan is to expand the Navy to 350 ships (from about 270). That frankly isn’t affordable unless a significant number of ships are small vessels like LCS,” said Loren Thompson, chief operating officer of the Lexington Institute, an Arlington, Va., policy research group that studies military matters.

“It costs less than any other warship in the fleet,” Thompson said.

The Navy is expected to select the design for the 12 frigates in the next couple of years. Marinette or Mobile could be eliminated from the program if they don’t win a bid for the new ships.

Thompson said he thinks the current Marinette design, which is very different than the tri-hull ship built in Mobile, is well-positioned for the change.

-ends-







prev next

Official reports See all