No bids on LCS?

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.

Comments

  1. In other words, they realize their own price estimates are so bad that they aren’t even willing to stake money on them. Brilliant. Why not place the risk with making such mistakes on ALL contracts with the contractors? Then they’d be in the position of either having to make their cost estimates realistic or not get any work.

  2. I agree to a point. By all means………………..fixed price contract (here comes the BUT), but, that means the client MUST give up morphing or evolving the design they asked for the bid on. If you want to make design changes AFTER the bid has been awarded, you have to expect to pay more.

  3. Hopefully the contractors stick to their guns and just say no. The Navy brass has to learn how to order a ship. Constant changes in designs and requirements is what is killing this program. Along with requiring mutually exclusive demands – Extraordinary high speed, endurance, high firepower, high automation and low cost. Pick any three. The navy so far has gone for speed, endurance and automation and complained about the cost. Personally, the LCS needs to drop the speed down about 10-15 knots, and upgrade the firepower. These boats are practically defenseless against anything stronger then pirates.

  4. Well, I hope that both sides realise the folly of the ‘little crappy ship’ and scrap it altogether. There are some excellent patrol, corvette and FFG designs from our allies that we ought to be persuing, alonmg with some of those fine German conventional subs.

  5. One item these ship builders are worried about is the cost of steel and other specialty metals. The cost of these items has gone through the roof in the past few years and even this year the mills are pricing from month to month. Five years ago a really big buyer of steel like a ship builder could contract at a fixed price for all of the steel for a ship but, not today. Knowing what I know about metal pricing I would not give a fixed price for a ship with that much metal in it.

  6. Nicholas, This may be more info than you want be here goes. From the early 1980s until about 2001 steel prices were practically level. Yes, there were some hiccups during that time but a standard 2′ x 2′ x -+’ angle iron ran about 20 cents per lbs. And plate steel ran in that same range. From 2001 until now steel has been on a steady march upward with that same angle selling for right at 50 cents per lbs. The cause is multi fold. During that 20 year run there was a worldwide over supply of steel making capacity. This was especially true here in the states. Politicians kept propping up inefficient and failing U.S. steel mills. However, by the late 1990s these mills were allowed to go out of business. The second thing that happened is that a lot of manufacturing that required steel left this country and went to China and India. The Chinese bought some 30 to 50 mills here and around the world crated them up and shipped them to China so that they would have a ready supply of steel for this manufacturing. Now the third thing is about 50% of all the steel manufactured in this country comes from melted down scrap steel. Oh yeah, where do we get a lot of scrap steel from? We get it from those manufacturing plants that use steel and then create scrap in the process. Where are those plants?–..Yeah–. China. China has contracts with steel mills world wide booking rollings for years to come. The fourth reason the environmentalist are standing in the way of digging for more iron ore and the burning of coal in the smelting process. The fifth reason is we get a lot of our steel from countries that trade in currencies that are much stronger that ours. Any steel bought in Euros has an automatic 50% premium attached to the price. Well, I am sure that others can bring some more light to the issue but these are some of the reasons. One more, it takes a lot of energy to makes steel. So, with energy prices going up so goes steel.

  7. Nicholas, My bad.. typo… not enough caffiene in the system when I typed that. Sigh….. Look, I live across the street from Bath Iron Works. I don’t want to see them founder, but at the same time, as a former Navy man and a taxpayer, I am damned tired of seeing our nation’s wealth go towards ships that are either not needed, or that are at best a frankenstein’s monstoer of tech and mission chaos, systems procured without reason or mission needs, because somebody somewhere thought they were neat. We need LOTS of ships that can do one or two things really well, not a handful of multi-mission hulls that are neither fish nor fowl. In a real war, we won’t have the luxury of pulling ships out of the line to swap out modules for different missions. We need dedicated Mine Warfare boats, ASW ships, AAW platforms, etc. I could go on and on, with subkects like diversity enterprise, sea swar, optimal manning levels, etc. All these things need to be scrapped and the whole Navy philosophy redone. Suddice to say that [rpcurement is broken, and that right badly. So are our uppoer levels of leadership. We need a revolution to clean house.

  8. We need LOTS of ships that can do one or two things really well, not a handful of multi-mission hulls that are neither fish nor fowl.’ I think you’re right, and the same applies to aircraft too. Possibly other types of vehicle. There are always compromises, but the more tasks a vehicle has to perform, the more compromises are required, and performance in each separate area suffers.

  9. Regarding the multi-role ships and planes, I don’t think we’re going to get out of that spiral until/unless disaster strikes in the form of a major war. Because of limited funds, there is major incentive to make one platform perform multiple tasks to save money. Adding all of these tasks makes the platform much more expensive, so you can’t afford to buy as many of them. This makes it important to add even more roles to each platform, which just raises the cost even more. Adding secondary roles to ships or planes after the fact makes sense. You find a plane that meets your needs and add a pod or build a few specialized variants or whatever to get a recon version or a wild weasel or even a tanker like the KA-6. The EA-6 Prowler, of course, is a specialized variant of the A-6. This makes sense. Designing secondary roles into planes or ships as second (and third and fourth) primary roles almost always does not. You’re already compromising on every design. Fighters already compromise between speed, stealth, performance, payload, cost, and more. Adding more roles means you’re compromising your fighter even more, usually in a direction away from most of a fighter’s most important characteristics. Then you end up with things like an F-18E replacing an F-14 and an F-18F replacing an A-12. Maybe nice for peacetime budgets, maybe not so nice for when the shooting starts. And, as I’ve said before, where is the 21st century FFG-7? An LCS with ASW modules? That’s kinda funny unless we need to start protecting shipping from enemy subs.