LCS Kerfuffle: Navy, GAO May Be In ‘Violent Agreement’ After All

CAPITOL HILL: Bark, it turns out, does not necessarily correlate with bite. The Government Accountability Office is infamous for its often scathing reviews of Pentagon programs, and its latest report on the Navy’s Littoral Combat Ship — one of GAO’s favorite targets — says Congress should “pause” LCS procurement until key systems are more adequately tested. But, as a GAO witness admitted in a hearing this morning, there may actually be nothing the Navy could or should do differently than its current shipbuilding plans.

That said, the ships themselves — the so-called seaframes — are just one of the three pieces of the LCS program and, by GAO’s reckoning, they are the least problematic. GAO worries more about the LCS mission modules, the plug-and-play equipment that goes on the seaframe to kit the ship out for specific missions. And GAO worries most about the evolving concept of operations (CONOPS) for how the Navy is going to maintain the LCS vessels and fix them when they break down, as the first LCS, USS Freedom, did just days ago off Singapore. In many ways, the GAO’s proposal to “pause” procurement looks like an attempt to hold hostage the best-performing part of the program, the seaframes, until the Navy shapes up on the parts that GAO is really worried about, modules and CONOPS.

It’s not easy to change course on a program this far along. 24 ships are already under contract despite LCS still being formally under “low-rate initial production” (LRIP). “We’re married into a lot of this that we can’t change,” the subcommittee chairman, Rep. Randy Forbes, told me after the hearing. “A lot of this has been poured into concrete, as you know, but I think there are some avenues that we have” to make “modifications,” he said, if not wholesale changes.

Congress needs to conduct serious oversight and get real answers to tough questions, Forbes said: “I hope we don’t just whine.”

GAO’s latest report on the Littoral Combat Ship program, published today, lambasts the Navy for building dozens of ships before the design is fully tested, and it recommends slowing the program down. But when GAO’s managing director for acquisitions issues, Paul Francis, spoke to the House Armed Services subcommittee on seapower today, it became clear GAO’s call for a “pause” is much more bark than bite.

GAO’s near-term recommendation is for Congress to “restrict” — i.e. withhold — the money the Navy has requested in the 2014 budget to build four more LCSs until the military provides several key reports. But Francis said he saw that restriction as a threat to force the Navy to produce the data, not as a punishment that would actually be carried out. The Navy could provide the required reports as late as March ’14 without delaying the actual procurement of the ships, he said: “I don’t envision a scenario where the 2014 buy actually gets held up.”

Rep. Forbes told me he thought Francis’s scenario made sense. “Restricting the money flow… I think that’s a very realistic thing that can happen, if we don’t continue to receive the explanations and answers that [Assistant Secretary of the Navy Sean] Stackley has said he’s going to provide.” Note that enormous “if”: Stackley told both the hearing and reporters gathered afterward that he’ll happily provide all the needed data and (unsurprisingly) that Congress doesn’t need to freeze any funds to force the Navy to pony up. But, if it’s not just a bluff, I asked Forbes, how do you really restrict funds without disrupting the current contract in ways that just cost the taxpayer more? That’s “very, very difficult,” the chairman admitted.

Then there’s GAO’s second and more dramatic recommendation: When the current multi-ship, multi-year “block buy” contract expires in 2015, the Navy should reduce the rate at which it buys Littoral Combat Ships to the “minimum” required to keep the production lines alive until thorough testing is completed. But, Francis acknowledged, the Navy already plans to slow production from the four a year before 2016 to two or three a year thereafter. If the Navy continues buying two types of LCS from two different shipyards — itself a controversial policy — then two or three ships IS the minimum to keep both in business.

“I don’t know if there’s a downselect [to one variant and one contractor] envisioned out there,” Francis told the hearing. “If there isn’t, then that rate would comport with our recommendation, which is keep the rate at the minimum sustained rate of between two and two ships a year until operational testing [ends], so we might be in violent agreement.”

“I’d like to have that on the record, that the GAO said they are in agreement with the Navy,” Assistant Secretary Stackley broke in, prompting roars of laughter around the room.

Stackley, for his part, took pains to agree with GAO on many points. “The LCS program was initiated with critical flaws, we’re all aware of that,” he said in his opening statement, a point that he repeated throughout the hearing. But the Navy has got things on track, with a stable design, falling costs, and high quality, he said, all of which would be jeopardized by a disruption to production: “Now is not the time to slow the program and add cost.”

Francis agreed the LCS seaframes are doing fairly well. But the mission modules are struggling in testing, he said. The Navy had to cancel two important components of the mine warfare module, for example, a helicopter-towed “influence sweep” to detonate mines en masse — that will now be done by a semi-submersible robot — and a quickfiring cannon to detonate mines near the surface.

Still more unnerving to the green eyeshades at GAO, the Navy’s concepts for operating and maintaining the ship are still nascent. That makes it difficult to estimate the long-term bill to operate and support the LCS fleet. “O&S costs are probably the biggest risk,” Francis said. “[It’s] a new concept of operations”: Whereas traditional ships have room to carry lots of maintenance personnel and spare parts onboard, LCS is so small, yet so technologically complex, that it will rely heavily on maintenance facilities ashore. If that proves unworkable or unaffordable, said Francis, “There’s no plan B there.”

So far it’s working fine, insisted the head of the Navy’s “LCS Council,” Vice Adm. Richard Hunt, when I asked him after the hearing. “From the initial results… INITIAL results — and what we’re seeing with Freedom right now, I think we’re tracking very close to the expected costs, and those will go down as we do follow on deployments.”

Setting up any system for the first time is expensive, said Vice Adm. Hunt, and the maintenance infrastructure in Singapore is currently supporting just one ship, the Freedom, which means a lot of overhead. “When I start operating the LCS in groups of four — which is really the [concept] of how we’re going to utilize them — those costs come down considerably,” Hunt told me. And as sailors and contractors learn the ship and its systems better, they’ll find cheaper and more efficient ways to work, he said: “We will adjust those things over the next year or so to get the optimum efficiency.”

GAO wants Congress to hold the Navy’s feet to the fire to make sure that happens. I

Once the new block buy contract is let in 2016, too much of the LCS program will be locked in and Congress’s hands will be “tied,” Francis told the subcommittee. “You have some leverage between now and the spring of 2015: Use it.”

“If the program’s on track, that’s good,” Francis said, “but we don’t want it to be on rails that we can’t make adjustments.”