Opening Statement by Seapower and Expeditionary Forces Subcommittee Chairman Gene Taylor:
“The hearing will come to order. Good morning and welcome. Today the subcommittee meets in open session to receive testimony on the Littoral Combat Ship Program.
“Our witnesses today are RADM Vic Guillory, Director of Surface Ship Programs for the Chief of Naval Operations, RADM Bill Landay, the Program Executive Officer for Surface Ship Construction, and Ms. Anne Sandel, the Program Executive Officer for Littoral and Mine Warfare. I thank the witnesses for taking the time to be with us today.
“To call this program troubled would be an understatement. The fact of the matter is this program has so far delivered one ship. Just one ship. When I look at the plan from just two years ago, we should by now have at least four ships delivered, three more nearing completion from a fiscal year 2008 authorization, six under contract from a fiscal year 2009 authorization, and today we should be discussing the authorization of six more ships for fiscal year 2010. That would be a total of 19 ships.
“So instead of having 13 delivered or under contract with another 6 in this year’s budget we have one ship delivered that will likely tip the scales well above two and a half times the original estimate and one ship that might finish this summer, with similar if not higher cost growth. The Navy cancelled two previously authorized ships, no ships were placed under contract for fiscal year 2008 and no contract award has been made for the two ships authorized for fiscal year 2009. And all this is from the program that was hailed as a poster child for its ‘transformational’ and ‘affordable’ acquisition strategy.
“It seems all the program has accomplished is ‘transforming’ a realistic goal of achieving a 313 ship fleet into a very real disappointment in which neither competitor shows remorse for being a year late and hundreds of millions of dollars over budget and from what I can see, neither competitor has a plan or even a desire to do any better because they can count on the Navy throwing more money at the problem.
“This program is not just a lesson of over-optimism, poor management, and a lack of proper oversight. Even though all those things occurred in spades, the fundamental lesson is flawed strategic planning. Flawed in the belief that the government can pass on to industry decisions that are inherently governmental; flawed in the belief that untested and unproven concepts, such as reconfigurable mission modules, can be incorporated into an acquisition program without testing and verifying the concept on surrogate platforms; and finally flawed due to the absence of a ‘plan B’ for needed capability in the Fleet.
“I believe it is the lack of a ‘plan B’ which has wedded the Navy so completely to this program. Particularly in the area of mine warfare, the LCS is the only future they see. Dropping the LCS program to develop another mine warfare platform is viewed as unacceptable in schedule. And they might just be correct.
“However, because the Navy is at the moment stuck with continuing the LCS program it does not mean that the current strategy for buying these ships has to continue. I have nothing against either of the lead contractors, but I know this: they both contracted to build a ship for $220 million dollars and they did not even come close.
“I understand the Navy was guilty of changing the design specifications with the implementation of Naval Vessel Rules but I fail to see how that resulted in more than doubling the price and slipping 18 months of schedule. I am also concerned that the Navy has not been able to come to terms with the contractors for the ships authorized last year.
“It appears to me the solution is simple. Bring true competition into this program, not the pseudo competition we currently have between the two poor performers but true competition based on price, schedule, and quality. I have been asking for over two years if the government owns the rights to the design drawings of the ships so they can bid them out directly to any shipyard with the capability of constructing the vessels. The answer seems to be yes and no.
“I understand that the prepared testimony addresses this question, however, I would like the witnesses today, on the record, to explain that position and answer in layman’s terms, not the language of the professional acquisition executive, the exact claim the government has on the technical design rights to both the seaframe and the combat system.
“I would then like the witnesses to explain how long it would take, what organization would be responsible, and how much it would cost to develop the ‘technical data package’ described in the prepared statement that is required to bid the ships directly to other shipyards, or the current shipyards divorced of the lead contractors. Ranges of cost and time are acceptable, what is not acceptable is taking the question for the record.
“So far I have discussed just the ship, just what the Navy refers to as the ‘seaframe.’ Today’s hearing for the first time brings in the official responsible for the mission packages that are purported to give this vessel multi-mission capability. Although at least one of each type of mission modules has been developed I am very concerned that major components of the overall ‘mission package’ are still under development or have not been thoroughly tested.
“Therefore, I would request that Ms. Sandel update the subcommittee on the remaining development and testing for all of the mission packages. I would also like to know if any existing Navy platforms can operate with an LCS mission module as a stop-gap capability filler until sufficient LCS ships are constructed.
“Everyone should understand that the current situation of these vessels costing in excess of a half billion dollars cannot continue. There are too many other needs and too little resources to pour money into the program that was designed to be affordable. I would also like to remind all of the parties involved that, particularly right now, you don’t want to be the program that is breaking the bank. From what I read in the newspapers there are no ‘protected programs’ in the ongoing debate on affordability.
“Of course, none of the witnesses sitting in front of us today were responsible for the program when it began. They have inherited a mess and are doing their best to fix what they can.
“I appreciate that. Now is the time for frank talk on what needs to be done. We need the best price and the best quality we can get for these vessels whether with the current lead contractors after they finally get the message or after changing course and bidding directly to shipyards.
“Before I ask the Ranking Member for his remarks I would like to remind the subcommittee that competition sensitive information such as current estimates of prices, are protected by statute. However, the Navy has agreed to answer these types of questions directly to individual Members in the appropriate forum and under the conditions agreed to by the Navy General Counsel and the committee.
“I now call on my friend from Missouri for any remarks he may wish to make.”
Click here for the related statement by Todd Akin (HTML format), the subcommittee’s Ranking Republican.
Click here for the opening statement of the US Navy three witnesses (11 pages in PDF format) on the HASC website.
The full hearing transcript is available in video webcast format on the HASC website.