U.S. Navy to Delay Award of Frigate Construction for a Year

(Bloomberg) -- The U.S. Navy will delay by at least a year plans to award a multibillion-dollar construction contract for a frigate meant to succeed the troubled Littoral Combat Ship, service officials said.

The Navy has decided to put off until fiscal year 2020 its award of a contract for the frigate. Lockheed Martin Corp. and Austal Ltd. are offering competing proposals. Rear Admiral Ron Boxall, the service's head of surface warfare, and Rear Admiral John Neagley, the LCS program's executive officer, announced the move Wednesday in a statement delivered to the House Armed Services seapower panel. The decision was originally expected for mid-2018.

“The Navy's revised acquisition strategy is under development and will ensure designs are mature prior to entering into a detailed design and construction contract,” Boxall and Neagley said in their joint statement. “The Navy will engage with industry” to “support an aggressive conceptual design effort, leading to a request for proposals to award” the design and construction contract in the fiscal year that starts Oct. 1, 2019, according to the statement.

The statement was unclear as to whether the Navy is delaying its choice between Lockheed and Austal as well as the award of the initial contract.

The “specifics on that will come out when we come out with” the Pentagon's fiscal 2018 budget, Boxall told reporters after the hearing. “We are now focused on a 2020 contract award -- that's our goal.”

Delay's ‘Reassuring'

Representative Rob Wittman of Virginia, the Republican chairman of the seapower subcommittee, told reporters the delay is “reassuring in the sense that we want to make sure we go through the proper due diligence” to ensure “the design's going to be mature” and “we fully understand the requirements.”

Lockheed and Austal now make different versions of the Littoral Combat Ship that have been repeatedly criticized for cost increases, schedule delays and vulnerability in combat. The Government Accountability Office last month said Congress should consider delaying the Navy's expected request for as much as $9 billion to start work on the 12 frigates.

The GAO's report said a delay beyond fiscal 2018 is warranted because too many unanswered questions remain about the new vessel's cost and capabilities.

The decision represents “a one- or two-year shift to the right from the Navy's previous stated intention to do it in fiscal 2018 or 2019,” Ron O'Rourke, the naval analyst for the nonpartisan Congressional Research Service, said in an email.

Trump's Pledge

The Littoral Combat Ship has been controversial, with two defense secretaries under former President Barack Obama questioning whether the light ship intended for shallow coastal waters could survive in combat and then cutting back the numbers planned. But the LCS and the successor frigate would be one path to deliver on President Donald Trump's pledge to expand the Navy's fleet to 350 vessels from about 272 today.

The Navy has now established a “Frigate Requirement Evaluation Team” to update the service's previous analysis in 2014 of what capabilities the new vessel should possess. The team is reviewing the feasibility of incorporating even more combat punch and enhanced survival features. The results will allow the Navy to refine the designs the two contractors will provide, they said.

The GAO said authorizing the money isn't yet justified because the program has “no current formal cost estimate — independent or otherwise,” will not “have begun key detail design activities” and “has significant unknowns in regards to operational performance.”

“If in fact the Navy has decided to push back” the contract award to fiscal 2020, “that is a change in the frigate's acquisition strategy that is consistent with our recommendations to gather more information on the ship's design, cost, and capabilities prior to awarding a contract,” Michele Mackin, a GAO director who supervised preparation of the report, said in an email.

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