BIW decries cancellation of warship deal

PORTLAND – The Navy has canceled another of the new generation of speedy and maneuverable warships, this one to be built by General Dynamics Corp., after efforts to control costs failed.

After more than a month of talks, the Navy and General Dynamics said last week they could not agree on a restructured contract that contained cost overruns in a way that both parties could live with.

Bath Iron Works, a General Dynamics subsidiary and lead contractor on the project, said the Navy rejected its plan for a fixed-price incentive agreement that reflected “realistic” cost estimates based on construction of its first ship in Mobile, Ala.

“We are disappointed that the Navy has decided to reject the proposal,” Bath shipyard spokesman Jim DeMartini said Thursday.

It’s the latest setback for the Littoral Combat Ship, a warship built for nearshore operations that has been plagued by cost overruns. The initial ships have cost 50 percent to 75 percent more than the initial budget of about $270 million per ship, the Navy said.

The Navy already canceled the second of two ships to be built by Lockheed Martin after failing to agree to a fixed-cost contract.

With its action Thursday, the Navy now has canceled the second of two ships of a competing design offered by General Dynamics.

That leaves only two ships, which are nearing completion, under contract. Lockheed Martin’s LCS-1 is being built at Wisconsin’s Marinette Marine Corp., while General Dynamic’s LCS-2 is being built at Alabama’s Austal USA shipyard.

The Navy, which hopes to build 55 of the ships, rushed construction of the ships under an expedited process using smaller shipyards.

Despite Thursday’s actions, Navy Secretary Donald Winter and Adm. Gary Roughead, chief of naval operations, remain committed to the warship.

“I am absolutely committed to the Littoral Combat Ship,” Roughead said in a statement. “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.”

Members of Maine’s congressional delegation expressed disappointment at the decision announced last week.

“I have been assured by Secretary of the Navy Winter of the Navy’s continuing commitment to this extraordinarily versatile ship and to the LCS program,” said Republican Sen. Olympia Snowe. “Moving forward, I’m optimistic about BIW’s future participation in the continuing LCS program where BIW will continue to demonstrate how we have the premier shipbuilders in the world.”

Democratic Rep. Tom Allen of the 1st District said that “while the need to address cost increases is critical, our primary obligation is to provide the fleet with ready warships and to ensure a productive shipbuilding industrial base. Since 2001, the size of the Navy has shrunk from 317 ships to less than 280 today. We should be investing to grow the fleet.”

The Navy, which could choose to build one or both designs, envisions the warships meeting threats including modern-day pirates and terrorists who turn speedboats into suicide weapons, as well as conducting mine removal and anti-submarine missions.

Both ships are powered by steerable waterjets, eliminating the need for propellers and allowing them to go into shallower water.

Lockheed Martin’s version resembles a traditional frigate or destroyer but features a sleek, semiplaning hull, while General Dynamics’ version is an all-aluminum, three-hulled vessel based on a fast ferry.