Shipbuilders may decline to bid on next LCSs
Littoral Combat Ship problems continue:
Sources at Lockheed Martin and General Dynamics confirm that officials are hard at work preparing responses to the Navy’s March 31 Request for Proposal (RfP). But they say the Navy’s desire to transfer risk to the contractors may abolish any incentive to respond.
“‘No bid’ is always an option,” said one industry source...
Navy Secretary Donald Winter has insisted that further LCS vessels be built for a fixed price, rather than the cost-plus contracts normally used for early ships in a class.
After the original contract awards, the shipbuilders expected to build their second ships under a cost-plus arrangement. But last year, Winter launched negotiations with each company, seeking to change to a fixed price. Those talks failed, and the Navy cancelled Lockheed’s LCS 3 and GD’s LCS 4.
Congress also has imposed a cost cap of $460 million on the ships, although current estimates are that the first ships might cost around $500 million.
Both designs are still evolving, and both contractors are reluctant to commit to fixed prices without a final design in hand.
