LCS 4 canceled

Navy Terminates Littoral Combat Ship (LCS 4) Contract

News release:

Secretary of the Navy Donald C. Winter and Chief of Naval Operations Adm. Gary Roughead announced today that the Department of the Navy is terminating construction of the fourth littoral combat ship (LCS 4) for convenience under the termination clause of the contract because the Navy and General Dynamics could not reach agreement on the terms of a modified contract.

The Navy had not yet authorized construction on LCS 4, following a series of cost overruns on LCS 2. The Navy intended to begin construction of LCS 4 if the Navy and General Dynamics could agree on the terms for a fixed-price incentive agreement. The Navy worked closely with General Dynamics to try to restructure the agreement for LCS 4 to more equitably balance cost and risk, but could not come to terms and conditions that were acceptable to both parties.

The Navy remains committed to the LCS program. –LCS continues to be a critical warfighting requirement for our Navy to maintain dominance in the littorals and strategic choke points around the world,” said Winter. –While this is a difficult decision, we recognize that active oversight and strict cost controls in the early years are necessary to ensuring we can deliver these ships to the fleet over the long term.”

–I am absolutely committed to the Littoral Combat Ship,” said Roughead. –We need this ship. It is very important that our acquisition efforts produce the right littoral combat ship capability to the fleet at the right cost.”

The fixed-price deal the Navy was trying to switch to was apparently not acceptable.

The second ship from both the LCS 1 Freedom-class and the LCS 2 Independence-class have now been canceled. Cost overruns have plagued the program, with the Navy and the builders blaming each other.

Comments

  1. Great, so now we’ve spent how many billions of dollars with not even a toilet seat to show for it. No one is accountable. No one will lose their job. We will have spent billions and get nothing AGAIN.

  2. Roger that, Dfens! I have to admit I know next to nothing about defense contracting, it seems like it shouldn’t be that complicated. The Defense Department and/or Armed Service/s write up what they what, lay out the desired capabilities, and specifications and put it out for bid. The contactors bid on it (if they’re interested), the Defense Department awards the contract to one of the bidders based on ability to build the project to time, standard, and cost. Then monitor their butts and hold’em to the contract. There should be penalties built into the contract for not adhering to timelines (excepting changes requested by the DOD etc), and they should only get paid what the contract called for (excepting the same thing).

  3. The theory is great until it hits the real world. In the real world the government watch dogs who are supposed to be holding the contractor to the contract are also the apologists for the program within the department of defense. Instead of watching the contractor, which, as it turns out, it impossible, they become nothing more than the contractors representative and apologist. Also it turns out you cannot require someone to do a good job, especially when it comes to brain work like engineering. If the watch dog tells the contractor how to build the ship, what’s the advantage to having the contractor? If they leave the job up to the contractor, then they are at the mercy of the contractor who typically chooses to do the stupidest possible thing becase they’ll make more money later fixing that stupid thing they’ve done. The system doesn’t work. You can’t require someone to do what’s smart or good. You can give them an incentive to do what’s smart. You can give them an disincentive to do what’s bad, but you cannot require them to do what’s smart. That’s where the system breaks down.

  4. Not fair. I tried to cancel my mortgage ‘for convenience under the termination clause’, because it really would have been convenient, and they said I couldn’t!

  5. Before you start on a whole bunch of ‘suggestions’ to reform the system, go look back to the ’80s when DoD pushed the Firm Fixed Price Development contract. By the late 80s and early 90s, most defense contractors wouldn’t touch a FFPD contract. Most of the programs started then went belly up because: 1. The military NEVER spells out everything it wants up front. This is two prong. With ten and twenty year development cycles you’ll end up getting brand new equipment designed for a threat that no longer exists (F-22 anyone) and the government people involved change every two/three years. Each new management team bringing its own agenda. 2. It’s a ‘DEVELOPMENT’ contract. A bid is always an estimate because if you had done this thing before, it wouldn’t be DEVELOPMENTAL. Claims that private developments can be done on budget are simply untrue. Many private, non-government projects have overruns. And the parties footing the bill have to decide if the project is still going to be justified after additional funds are expended. The government has decided in the LCS case that it’s not. Remember that the real managers of federal procurement is Congress. DoD can make regulations, Congress makes the laws that those regulations are created under in addition to jerking the purse strings. And those laws are endless.

  6. he military NEVER spells out everything it wants up front’ What a fascinating statement. Utterly false and completely true at the same time. The requirements and specifications for programs are insanely detailed, is some cases down to the number of threads a screw is to have. My personal favorite is the coffee maker that has to be able to operate in a +/- 10g environment. (The plane would not survive, but by GOD the coffee will still flow!) The issue is not with the military spelling out what it wants. It spells it out in incredible detail, however, it is often a moving target, as specifications constantly change. This is not to say that the contractor is just doing what the military wants. Very often, it is the contractor that initiates the change. Power point productions trumpeting cost savings, performance enhancements, if only the DoD added XY&Z to the program. For example; When the Comanche program was tanking, the contractor pushed for inclusion of the specification that required the Comanche to be able to control multiple UAV’s. This requirement did not save the program, but it did add a few tens of millions to the contractors earnings, and gave them a leg up on UAV avionics. Back to the point. Personally I hope the LCS program goes down in flames. The boats, simply sucked, the were under armed, essentially defenseless, and incapable of performing the missions specified, moreover the cost projections for the program were pure vaporware.

  7. Yeah, but, if LCS goes down in flames I WANT SOMEONE’S ASS! This is what pisses me off. F-22, sure it’s a piece of garbage compared to what we should have or could have had, but what are you going to do, wait another 25 years for another bloated development program to fail? Our naval fleet has dwindled to nothing while the contractors point the finger at the government for always changing requirements while the government points the finger at contractors for not following the requirements they don’t change, and, guess what, nothing gets fixed. The whole approach is fundamentally flawed. One person writes a requirement for the ship to be blue. Another writes a requirement for the ship to be green. Yet another writes a requirement for the ship to be purple. Which one is right? You’ve got 1,000,000 requiremenets, who knows what they all say or if they conflict? Then the poor engineer tries to make sense of this insane mess, but we are constantly being pressured by our management to do what is stupid because that’s where the money is, fixing stupid. We are forever going back to the government saying, ‘oh, I don’t think this is going to work. We’ve got to completely replan the program.’ And you know what, it always works. The government people don’t want to look stupid. They don’t want to lose their jobs. So they go to Congress and say, ‘it looks like it will take a bunch more money.’ It doesn’t matter if you’re working on a firm fixed or a cost plus contract if they’re going to rewrite the whole thing every the contractor screws up. That’s nothing but a red herring for the taxpaying dumbasses who continue to fund this abortive mess.

  8. Before we had this runaway bureaucracy writing millions of conflicting requirments, we had programs that worked. We had a dozen page statement of need that essentially said we need a Mach 3+ spy plane and what did Lockheed respond with? Did they say that was going to require a 20 year development program with funding out the ass and profit on every development dollar? Hell no, they said, ‘we’ve got this white hot airplane designer and he says he can build what you need.’ Period. No f’ing around with millions of requirements. None of these strap hanging turd polishers who call themselves ‘systems engineers’. There was a designer for the whole airplane and he delegated the details down to several hundred specialist design engineers who along with a few analysts handeled the details and they made the thing happen. Hell, you wouldn’t design a damn tricycle the way we do things now. We have 3D CAD systems, CFD, NC milling machines, NC lathes, finite elements structure analysis tools, everyone down the janitor has a computer that’s faster and has better graphics than a CRAY did when the SR-71 was developed, and all this has done for us is caused development times and costs to go up by nearly an order of magnitude? Who the hell is actually buying that crap?

  9. It would be much easier and cheaper to handle this project to some norwegian or sweden company. The ‘vikings’ still rule the coastal/littoral boat business.

  10. Technology has progressed to the point that in theory, we should be able to build things faster, smarter, better, then in the past. In the past an engineer would size up a project, apply his however many years of experience, come up with a 2nd worse case scenario, and build the widget to survive that. ( vs the 1st worse case scenario, you just bend over and kiss your rear goodbye.) If in doubt, build a test model, beat the hell out of it, and scale it up till you felt confident in your project. Today you run simulations out the yin yang using ‘fully validated’ variables (validated by who? top men)that tell you exactly where the widget will fail and in theory you can design you way through it. Murphy’s law being supreme insures that you can never design your way through it and so you get billion dollar destroyers whose frames buckle under normal operating conditions. The issue is not the technology, but how its used. It’s not used to design, but rather to cover your ass and rack up billable hours. Running 260 hours of simulations on tensile strength of a widget is a billable line item that almost never gets questioned. The fact that the widget can’t do what it is intended to do is irrelevant to the justification process for your billing. Take the old land warrior project that Raytheon was working in the late 90’s. One of the great ‘advances’ was the forearm mounted computer/communication/ super wonder device. thousands of billable hours were charged to that program. It was made to withstand some serious impacts. It was a marvel. Of course everyone working on the project knew it was going to fail. Technically, It was heavy and it sucked amps like they were going out of style. In practice soldiers tended to keep their hands occupied with something called a gun, so they really could not see the screen or access its functions. Some DOD genius thought to get around that problem by adding a requirement for an audio and visual cueing system, to alert the soldier that he had a message. The project went downhill from there. My point is, a lot of these neat systems that are supposed to facilitate the process of actually making a widget are really just used as entries in a billing justification sheet. Reports have a mandated minimum length that is based not on the content of what you are reporting on, but on how much ‘documentation’ is required support billable hours in the bid. With so many laws and regulations being passed that require X amount of justifications for anything (under the guise of preventing waste fraud and abuse) that the ‘can-do spirit’ of the past is crushed. It was and I imagine still is true that young engineers are treated like slaves. The senior engineers would hand off all the justification busy work to the new guy and head off to the bar. The really good engineers would quickly get sick of it and quit to go somewhere where they could actually build something. Everyone else just cranked out reams of crap, for the technical writers to try to put into a coherent narrative for the DoD to stamp and ignore.

  11. I remember that in the 1980s the press was contantly writing about waste in defense spending – the Bradley was a death trap, the A-10 was useless and so on. Much of this turned out to be wrong or exaggerated, but at least they cared. Even Hollywood noticed and turned the subject into a comedy (the execrable Eddie Murphy vehicle Best Defense). But today? Nothing. I guess modern journalists are comforted by the thought that ships and airplanes are not being properly built and armed. An effective weapon would scare them.

  12. I personally think it was due to their socialist agenda that these journalists wrote incessantly about the waste of the past. There were definite problems in the ’80s. In those days, the government only reimbursed our costs for development. We didn’t get any profit on it. That meant they pressured the hell out of us (engineers) to cut corners on development. This meant cutting out lots of necessary testing and it was the beginning of the end for R&D. Anything that created risk strung out development and hurt profits. Once the government started even reimbursing us for development, it meant the program would never die, not matter how big a piece of crap we developed, so innovation had already started into its death spiral. Once they started paying profit on development, the socialists had won. Why write about it any more? Getting profit on development put the headstone on the industry. Now not only did we not have any reason to innovate or do R&D, we also had incentive to drag out development for years. As many as 25 years for high visibility programs like F-22. James, the reason everything is at the same time over-designed and yet still doesn’t work with a damn is because no one designs anything today. They collect shall statements into a heaping, steaming pile, and pray to the engineering gods that something useful will poop out the back end. Unfortunately no creative process works that way. It is no more true for an engineering design than it is for a novel or Shakespearian play. A buttload of shall statements will never replace the intuition or accumulated knowledge and experience of a designer.