US Navy Purchases 2 Independence Class, 1 Freedom Class LCS in 2015

The Navy on Tuesday awarded Austal USA $691 million for two Littoral Combat Ships (LCS) and Lockheed Martin $441 million for one LCS and advance procurement funding for a second ship next year.

With its shipbuilding budget under pressure, the Navy last February broke from its four-a-year procurement strategy. Whereas both contractors had been producing two LCSs a year under a 20-ship, dual-yard block buy meant to stretch from Fiscal Years 2010 to 2015, the last LCS in the block buy would be deferred to FY 2016. Two more LCSs outside the block buy would be contracted in FY 2016, bringing the total to six over two years and leaving the Navy to decide how to allot those ships most efficiently.

Navy spokesman Chris Johnson told USNI News that as the Navy worked through how to allocate the three FY 2015 ships, “the Navy and industry have consulted on schedules, performance to date and related matters. Through the negotiations with both industry teams, the Navy determined that the most cost-effective option was to fund Austal USA two FY 2015 ships, and Lockheed Martin one FY 2015 ship plus advance procurement for one FY 2016 ship.”

USNI News understands that the Navy reviewed both Austal’s and Lockheed Martin’s shipyard schedules since 2010 to project how a change in production rate would affect future delivery schedules. The Navy found no appreciable difference between the two yards, meaning the decision came down to cost and not schedule.

Under the contract, Austal’s Mobile, Ala., yard will build the yet-to-be-named LCS-22 and 24, and Lockheed Martin subcontractor Marinette Marine in Marinette, Wisc., will build LCS-21. LCS-23 will be the FY 2016 Lockheed Martin ship, Johnson said.

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