Tuesday, August 24, 2010

U.S. Navy Puts Off LCS Decision

The long-awaited decision on which Littoral Combat Ship (LCS) design to buy will take a bit longer, the U.S. Navy said Aug. 23 - and that means the announcement of a choice might wait until just before year's end.

But the Navy, in a statement released Monday afternoon, announced it will request Final Proposal Revisions (FPRs) "soon" from competing firms Lockheed Martin and Austal USA.

"The Navy anticipates that FPRs will be received in September 2010, and will require that these revised offers remain valid for 90 days," the service said in its statement.

Cmdr. Victor Chen, a spokesman for the service's acquisition department, could not give a specific date for the FPRs to be turned in. If the responses are received by Sept. 30, the service would then presumably have until Dec. 30 to announce its decision.

The LCS program has gone through a long and at times torturous process since the decision was announced in 2004 to build competing designs from Lockheed Martin and General Dynamics. For a time, the Navy planned to put both designs into production, but in September 2009, Sean Stackley, the Navy's top weapon buyer, restructured the program and announced only one type would be built.

At stake are at least 51 ships. The service already has bought two ships from each competing team, and the Navy wants a force of 55 LCSs. When complete, the LCS fleet will number about one-sixth of the entire U.S. fleet.

GD and its shipbuilder, Austal USA, split up earlier this year for the purposes of bidding on the current contract, which will involve the design selection and the award of construction contracts for 10 ships. Another award for five ships will come in 2012, when, according to the Navy's rules, the winning shipyard can't be associated with the 2010 contract. GD, which would like to build LCS ships in one of its shipyards, was forced to split from Austal in order to bid on the 2012 contract.

The Navy's announcement of its decision to request more information from the bidders was not entirely unexpected. Democrats in Congress protested mightily after the Aug. 9 announcement by Defense Secretary Robert Gates that he would close the Joint Forces Command near Norfolk, Va., as an efficiency move. That meant that more than 6,000 jobs will be leaving Suffolk County, and Democrats, particularly those in close races, raised a mighty hue and cry in protest. As a result, further announcements that could affect job losses might be expected to be put off.

The full Navy statement reads:
"The Navy is proceeding with the LCS source selection diligently, thoroughly, and consistently with its source-selection plan and applicable law and regulations. The Navy is taking the time necessary to carefully review and analyze the competing proposals.

"To this end, the Navy is currently engaged in discussions with offerors and will request Final Proposal Revisions (FPRs) from them soon. The Navy anticipates that FPRs will be received in September 2010, and will require that these revised offers remain valid for 90 days. The Navy intends to make a contract award as expeditiously as practicable, consistent with its source selection plan, but in any event prior to the expiration of such offers.

"We understand there is keen public interest in this competition, but our duty to protect the integrity of the source-selection process, as well as the confidentiality of the information submitted by the offerors, significantly limits our ability to provide additional details about the ongoing competitive procurement at this time."

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