Pentagon Blocks Littoral Combat Ship Overrun From a GAO Report

(Bloomberg) -- The Pentagon office that reviews information to determine whether it's classified has blocked publication of potentially embarrassing data on cost overruns for the first two vessels bought under the Navy's primary Littoral Combat Ship contracts, according to a new congressional audit.

In a report examining Navy shipbuilding contracts, the U.S. Government Accountability Office deleted overrun information on two of the Littoral Combat Ships launched in late 2014 -- the USS Milwaukee built by Lockheed Martin Corp. and the USS Jackson built by Austal Ltd. -- at the request of the Defense Office of Prepublication and Security Review.

The GAO said the Defense Department “deemed the cost growth” on both vessels “to be sensitive but unclassified information, which is excluded from this public report. However, the percent difference” in cost for each ship “was above target cost.” Other types of ships were listed with specific data on cost increases that ranged from 4 percent to 45 percent.

“This seems to be an overly broad reading of competition-sensitive information,” said Mandy Smithberger, a director for the Project On Government Oversight's military reform initiative. “Taxpayers are footing the bill for these overruns. They deserve to know the costs.”

Shallow Waters

The Littoral Combat Ship has been controversial, with two defense secretaries under President Barack Obama questioning whether the light ship intended for shallow coastal waters could survive in combat and cutting back the numbers planned. While President Donald Trump and his defense secretary, James Mattis, haven't taken a stand on the ship, it could be one path toward Trump's pledge to rapidly expand the Navy's fleet to 350 vessels from about 272 today.

The two vessels are the first in a block of 10 that each contractor is building at regular intervals at what the Navy says are stable prices. The Navy plans to ask this year for authorization to build the final 12 of 40 ships as well as equipment for missions. Those final ships are described as “frigates” that will be better armed than the existing designs.

The LCS deletions were mentioned in a table that listed cost growth. 

“Decisions about what information is sensitive are made strictly by the agencies, though we do ask them to present what we would consider as a valid rationale,” Michele Mackin, a GAO director and the report's author, said in an email.

‘Sensitivity Markings'

“In this case, DOD's Defense Office of Prepublication and Security Review provided us” in a Nov. 2 letter “with sensitivity markings indicating what information was considered official use only, or competition sensitive,” Mackin said. “The discussions of LCS cost overruns were marked as such and they provided legitimate information about how such details could impact ongoing competition.”

The Pentagon office that sought the deletions is best known for reviewing manuscripts by current and former military personnel for sensitive information.

The letter to the GAO asking for the deletions was signed by an assistant on behalf of Mark Langerman, chief of the Security Review Office. Langerman didn't respond to an email asking for comment.

The Pentagon office “should have been able to disclose the magnitude of the cost growth even if some of the underlying details were competition sensitive,” said Steven Aftergood, director of the Federation of American Scientists' Project on Government Secrecy.

“The department failed to consider the public interest in knowing that cost targets were being exceeded, and by how much,” he said. “Instead, it looks like DoD is trying to keep unfavorable facts out of the public eye. In the long-run, that's not a smart move.”

Twenty-six ships of what's now a 28-vessel program of original Littoral Combat Ships are delivered or on contract; the last two are being authorized this year. Over a decade, the vessels went from an estimated cost of $220 million per ship to an average currently of $478 million apiece, according to the GAO.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert, C. Thompson