GAO 

United States Government Accountability Office

Report to the Subcommittee on 

Readiness and the Subcommittee on 

Seapower and Expeditionary Forces, 

Committee on Armed Services, House of 

Representatives 

LITTORAL COMBAT 

SHIP 

Actions Needed to 

Improve Operating 

Cost Estimates and 

Mitigate Risks in 

Implementing New 

Concepts 

February 2010 

GAO-10-257 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2010

LITTORAL COMBAT SHIP

Actions Needed to Improve Operating Cost Estimates

and Mitigate Risks in Implementing New Concepts

Highlights of GAO-10-257, a report to the 

Subcommittee on Readiness and the 

Subcommittee on Seapower and 

Expeditionary Forces, Committee on 

Armed Services, House of 

Representatives 

The Navy plans to spend about $28 

billion to buy 55 Littoral Combat 

Ships (LCS) and at least 64 

interchangeable mission packages 

to perform one of three missions—

mine countermeasures, 

antisubmarine warfare, and surface 

warfare—in waters close to shore. 

The Navy has been developing two 

different LCS seaframes and plans 

to select one for production in 

2010. Due to the small 78-person 

crew size—40 core crew, 23 for 

aviation detachment, and typically 

15 for mission packages—the Navy 

is developing new concepts for 

personnel, training, and 

maintenance. GAO was asked to 

assess the extent to which DOD 

has (1) estimated LCS long-term 

operating and support costs and (2) 

developed plans to operate and 

support LCS. To do so, GAO 

compared Navy cost estimates to 

DOD guidance and GAO best 

practices; and analyzed Navy plans 

to implement its concepts for 

personnel, training, and 

maintenance and the extent these 

plans included assessments of 

program risk. 

What GAO Recommends

GAO recommends, among other 

things, that DOD develop an 

estimate of the long-term operating 

and support costs which fully 

reflects best practices and use this 

estimate in making key program 

decisions, and conduct and 

consider the results of a risk 

assessment before committing to 

buy LCS ships in the future. DOD 

generally agreed with the 

recommendations. 

The Navy estimated operating and support costs for LCS seaframes and 

mission packages in 2009, but the estimates do not fully reflect DOD and 

GAO best practices for cost estimating and may change due to program 

uncertainties. GAO’s analysis of the Navy’s 2009 estimates showed that the 

operating and support costs for seaframes and mission packages could 

total $84 billion (in constant fiscal year 2009 dollars) through about 2050. 

However, the Navy did not follow some best practices for developing an 

estimate such as (1) analyzing the likelihood that the costs could be 

greater than estimated, (2) fully assessing how the estimate may change as 

key assumptions change, and (3) requesting an independent estimate and 

comparing it with the program estimate. The estimates may also be 

affected by program uncertainties, such as potential changes to force 

structure that could alter the number of ships and mission packages 

required. The costs to operate and support a weapon system can total 70 

percent of a system’s costs, and the lack of an estimate that fully reflects 

best practices could limit decision makers’ ability to identify the resources 

that will be needed over the long term to support the planned investment 

in LCS force structure. With a decision pending in 2010 on which seaframe 

to buy for the remainder of the program, decision makers could lack 

critical information to assess the full costs of the alternatives. 

The Navy has made progress in developing operational concepts for LCS, 

but faces risks in implementing its new concepts for personnel, training, 

and maintenance that are necessitated by the small crew size. Specifically, 

the Navy faces risks in its ability to identify and assign personnel given the 

time needed to achieve the extensive training required. GAO’s analysis of a 

sample of LCS positions showed an average of 484 days of training is 

required before reporting to a crew, significantly more than for 

comparable positions on other surface ships. Moreover, the Navy’s 

maintenance concept relies heavily on distance support, with little 

maintenance performed on ship. The Navy acknowledges that there are 

risks in implementing its new concepts and has established groups to 

address how to implement them. However, these groups have not 

performed a risk assessment as described in the 2008 National Defense 

Strategy. The Strategy describes the need to assess and mitigate risks to 

executing future missions and managing personnel, training, and 

maintenance. If the Navy cannot implement its concepts as envisioned, it 

may face operational limitations, have to reengineer its operational 

concepts, or have to alter the ship design. Many of the concepts will 

remain unproven until 2013 or later, when the Navy will have committed to 

building almost half the class. Having a thorough risk assessment of the 

new operational concepts would provide decision makers with 

information to link the effectiveness of these new concepts with decisions 

on program investment, including the pace of procurement. 

View GAO-10-257 or key components.

For more information, contact John Pendleton 

at (404) 679-1816 or pendletonj@gao.gov. 
Page i GAO-10-257 

Contents 

Letter 1

Results in Brief 4 

Background 7 

The Navy’s Operating and Support Cost Estimates Do Not Fully 

Reflect Best Practices and May Change Due to Program 

Uncertainties 10 

The Navy Has Made Progress but Faces Risks in Implementing Its 

Plans to Operate and Support LCS 20 

Conclusions 31 

Recommendations for Executive Action 33 

Agency Comments and Our Evaluation 34 

Appendix I Scope and Methodology 37 

Appendix II Comments from the Department of Defense 40 

Appendix III GAO Contact and Staff Acknowledgments 45 

Tables 

Table 1: Description and Quantity of LCS Mission Packages 8 

Table 2: Estimate of the Total Navy Personnel Required for a Fleet 

of 55 LCS Ships 21 

Figures 

Figure 1: Two Littoral Combat Ship Seaframes 7 

Figure 2: Notional Example of Risk Analysis Results Displayed in 

an S-curve Showing the Range and Likelihood of Possible 

Cost Increases 13 

Figure 3: Comparison of Average Training Days Required before 

Reporting on Board for LCS with Two Other Surface 

Ships for a Sample of Positions 25 

Figure 4: Timeline Comparing the Navy’s LCS Procurement Plans 

with Key Events Affecting Implementation of the 

Operational Concepts 30 

 Littoral Combat Ship 
Abbreviations 

CAPE Cost Analysis and Program Evaluation 

DOD Department of Defense 

LCS Littoral Combat Ship 

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Page ii GAO-10-257 Littoral Combat Ship
Page 1 GAO-10-257 

 

United States Government Accountability Office

Washington, DC 20548 

 

February 2, 2010 

The Honorable Solomon Ortiz 

Chairman 

The Honorable J. Randy Forbes 

Ranking Member 

Subcommittee on Readiness 

Committee on Armed Services 

House of Representatives 

The Honorable Gene Taylor 

Chairman 

The Honorable W. Todd Akin 

Ranking Member 

Subcommittee on Seapower 

 and Expeditionary Forces 

Committee on Armed Services 

House of Representatives 

With the ability to maneuver in shallow waters inaccessible to other 

surface combatants, the Littoral Combat Ship (LCS) is a new class of 

warship meant to facilitate U.S. Navy access to and operations in the 

littorals, which are waters close to shore. The Navy plans a major 

investment in the LCS program, which could cost $28 billion to buy 55 

ships and related, interchangeable combat capability. The planned 55 ships 

would comprise about 38 percent of the Navy’s surface combatants 1

 in a 

313-ship Navy. The Navy is using two contractors to build differently 

designed ships, called seaframes. As of October 2009, the Navy had 

procured two ships (one of each design) and contracted for two more (one 

of each design). The Navy plans to select one design in fiscal year 2010. To 

increase flexibility, the LCS’s combat capability will be contained in 

removable, interchangeable mission packages2

 to perform one of three 

primary missions—mine countermeasures, antisubmarine warfare, and 

1

 Surface combatant is a collective term including destroyers, cruisers, frigates, and the 

Littoral Combat Ship. 

2

 Each mission package consists of mission systems (such as weapons and sensors), 

support equipment, crewmembers, and an aviation detachment of manned helicopters and 

unmanned aerial vehicles. 

 Littoral Combat Ship 
 

surface warfare3 concentrating on countering small surface boat attacks. 

Each LCS ship will carry only one package at any given time. Further, 

since the cost to operate and support a weapon system traditionally 

accounts for over 70 percent of the total cost over a system’s lifetime, the 

resources needed to operate and support the LCS seaframes and mission 

packages could be significant over time. 

In 2005, the Navy began developing an LCS concept of operations which 

broadly describes these unique approaches to personnel, training, and 

maintenance and outlines the responsibilities of shore organizations to 

support LCS operations. LCS differs from other Navy ships in three key 

areas—personnel, training, and maintenance. First, a deployed LCS will 

have a total of 78 personnel on board comprised of 40 core crewmembers 

to operate the ship, 15 to operate the mission packages, and 23 for the 

aviation detachment. A crew of this size is significantly less than on other 

surface combatants—about 172 for a frigate and about 254 for a destroyer. 

In order to increase operational availability, the Navy intends to rotate 

crews about every 4 months to enable each LCS to deploy continuously for 

up to 18 months. Second, due to the decision to operate the ship with 40 

sailors, training will be tailored to each position and include training in 

skills outside the crewmember’s specialty. For example, a fire fighter 

specialist is also required to be trained in an engineering skill area. Third, 

the crew will perform minimal maintenance on board the ship and will rely 

extensively on support from organizations ashore to perform maintenance 

and administrative functions such as maintaining supply and pay records. 

Considering the Navy’s unique LCS concept of operations, you asked us to 

review the Navy’s efforts to estimate the program’s operating and support 

costs and to plan for how the ship will be operated and supported 

considering the small crew size. For this review, we assessed the extent to 

which the Navy has (1) estimated the long-term operating and support 

costs for LCS seaframes and mission packages; and (2) developed and 

implemented plans to operate and support the LCS particularly in the 

areas of personnel, training, and maintenance. 

To assess the extent to which the Navy estimated the long-term operating 

and support costs for LCS seaframes and mission packages, we reviewed 

documentation of seaframe and mission package cost estimates prepared 

 

3

 The surface warfare package includes a maritime security module which could be 

employed by itself without the other components of the surface warfare package. 

Page 2 GAO-10-257 Littoral Combat Ship
 

by the Naval Sea Systems Command. We compared the estimates to cost 

estimating best practices identified by the Office of the Secretary of 

Defense’s Office of the Director of Cost Assessment and Program 

Evaluation (CAPE)4

 as well as in our GAO Cost Estimating and 

Assessment Guide.

5

 To assess the extent to which the Navy analyzed the 

force structure requirements underlying the planned purchase quantities 

of LCS seaframes and mission packages, we reviewed force structure 

analysis documents and met with officials of the Assessments and Surface 

Warfare divisions of the Office of the Chief of Naval Operations. Although, 

as discussed later in this report, the Navy’s estimates did not fully reflect 

best practices, they were based on a cost estimating process we deemed 

sufficient for reporting the results of our analysis of the Navy’s operating 

and support cost estimates. 

To assess the extent to which the Navy has developed and implemented 

plans to operate and support LCS, particularly in the areas of personnel, 

training, and maintenance, we reviewed and analyzed the Department of 

Defense (DOD) and Navy guidance and reviewed key studies and planning 

documents including the LCS Wholeness Concept of Operations. 6

 We also 

reviewed prior GAO products and DOD guidance on risk management to 

assess the extent that Navy plans included assessments of program risk. 

To estimate long term LCS personnel requirements, we analyzed Navy 

documentation and validated the results with appropriate Navy officials. 

To compare LCS training days to training days for other surface ships, we 

first identified a non-probability sample of LCS positions from both 

seaframes based on criteria for which positions required a wide variety of 

training or, based on Navy information, might be hard to fill. Then we 

compared the required training days for these LCS positions with 

comparable positions on two other surface ships. We validated the data 

 

4

 This office was formerly known as the Cost Analysis Improvement Group. The functions 

of that office were transferred to the Office of the Director of Cost Assessment and 

Program Evaluation by the Weapon Systems Acquisition Reform Act of 2009, Pub. L. No. 

111-23 § 101 (2009). See the note at 10 U.S.C. § 139c. Office of the Secretary of Defense, 

Cost Analysis Improvement Group, Operating and Support Cost Estimating Guide 

(Arlington, Va., October 2007), Office of the Secretary of Defense, Cost Analysis 

Improvement Group, Operating and Support Cost Estimating Guide (Arlington, Va., May 

1, 1992). 

5

 GAO, GAO Cost Estimating and Assessment Guide, GAO-09-3SP (Washington, D.C.: 

March 2009). 

6

 U.S. Fleet Forces Command, Littoral Combat Ship Platform Wholeness Concept of 

Operations (Revision C) (Sept. 24, 2009). 

Page 3 GAO-10-257 Littoral Combat Ship
 

and results with appropriate Navy officials. On the basis of the work 

described above, we concluded that the data had no limitations and were 

sufficiently reliable for our purposes. 

We conducted this performance audit from October 2008 to February 2010 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

The Navy has estimated operating and support costs for LCS seaframes 

and mission packages, but the estimates do not fully reflect DOD and GAO 

best practices for cost estimating and may change due to program 

uncertainties. Our analysis of the Navy’s 2009 estimates showed that the 

operating and support costs for the planned seaframes and mission 

packages could total $84.8 billion through about 2050.7

 However, although 

the Navy demonstrated some aspects of a high-quality cost-estimating 

process, we found that it did not follow some key cost-estimating best 

practices, including analyzing the likelihood that the costs could be greater 

than estimated, fully assessing how the estimate may change as key 

assumptions change, and requesting an independent estimate and 

comparing it to the program estimate. Typically, an independent estimate 

is prepared for a program’s second milestone decision point, referred to as 

Milestone B,8

 when lead and initial follow-on ships are normally approved. 

However, the Navy has not yet passed this milestone decision point or 

included operating and support costs in its annual reports to Congress on 

LCS. In addition, the Navy’s LCS operating and support cost estimates may 

change due to program uncertainties such as changes to the operational 

concepts, or completing and updating analyses of the required quantities 

of seaframes and mission packages. Specifically, Navy officials said that 

they had not analyzed the quantities required for one of the mission 

Results in Brief 

 

7

 All dollar figures in this report are in constant fiscal year 2009 dollars. The Navy assumes 

that each LCS seaframe will have a service life of about 25 years. The Navy can expect to 

pay operating and support costs until the last LCS is retired—the timing of which could 

vary depending on when the last seaframe enters service. 

8

 Department of Defense Instruction 5000.02. Operation of the Defense Acquisition 

System, Enclosure 2, Figure 1 (Dec. 8, 2008). 

Page 4 GAO-10-257 Littoral Combat Ship
 

packages or updated the quantities required for another package after the 

contents changed. Also, any changes in key assumptions, such as 

homeporting or crewing, could change the seaframe quantities required, 

which in turn could affect estimates of the program’s total operating and 

support costs. Considering that operating and support costs are typically 

about 70 percent of a program’s total costs, the information available to 

decision makers is limited without an estimate of the long-term operating 

and support costs that fully reflects best practices and without reporting 

these costs to DOD and Congress. However, such a complete cost estimate 

could enhance decision makers’ ability to make fully informed trade-off 

and investment decisions. For example, decision makers could benefit 

from an analysis of the long-term operating and support costs of each 

seaframe before deciding which one to buy for the remainder of the 

program. Also, decision makers could benefit from an analysis of the costs 

of options for what to do with the two ships of the design that is not 

selected. In addition, the absence of an independent cost estimate and 

analyses of how operating and support costs could increase over time 

limits the ability of decision makers to assess the affordability of LCS 

within the broader portfolio of Navy and DOD programs and to identify 

the resources that will be needed over the long term to support the 

planned investment in the LCS force structure. Further, information 

available to decision makers could be enhanced by basing estimates of the 

program’s total operating and support costs on complete and current 

analyses of seaframe and mission package quantities. To enhance decision 

making, we are recommending that DOD develop, and annually update, an 

estimate of the LCS program’s long-term operating and support costs that 

fully reflects best practices and use this estimate to make key program 

decisions such as which seaframe to buy, to annually report the estimated 

costs to Congress, and to update force structure analyses. DOD agreed to 

annually report the estimated costs to Congress and to update force 

structure analyses. Although DOD stated that the Navy will prepare 

updated costs estimates, one for each seaframe, DOD stated that, since the 

Navy has not released the solicitation for the fiscal year 2010-2014 

purchase of LCS, it is premature to discuss the criteria for selecting one 

seaframe design. Since operating and support costs constitute over 70 

percent of a system’s life-cycle costs, we continue to believe that decision 

makers should consider long-term operating and support costs when 

deciding which of the two seaframes to buy for the remainder of the 

program. 

The Navy has made progress, but faces risks in planning to operate and 

support LCS, particularly in implementing its new concepts for personnel, 

training, and maintenance. Although the Navy is conducting studies to 

Page 5 GAO-10-257 Littoral Combat Ship
 

determine personnel requirements for LCS, it has not fully identified these 

requirements for the ship and shore support and faces risks in its ability to 

identify and assign personnel over the long term. The Navy also faces risks 

in implementing its concept to achieve the extensive LCS training required 

as well as implementing its maintenance concept. The Navy acknowledges 

that there are risks in implementing its new LCS operational concepts and 

has established some groups that focus on the details of how to implement 

the concepts. However, these groups have not performed a risk 

assessment as outlined in the 2008 National Defense Strategy.9

 The 

Strategy describes the need to assess and mitigate risk including risks 

relating to the department’s capacity to execute future missions and 

manage personnel, training, and maintenance. If the Navy cannot 

implement its concepts as envisioned, the Navy may face operational 

limitations, may have to reengineer its operational concepts, or may have 

to alter the ship design after committing to building almost half the class. 

In contrast, having a thorough risk assessment of the new operational 

approaches to personnel, training, and maintenance would provide 

decision makers with information to link the effectiveness of these new 

operational concepts with decisions on program investment, specifically 

the pace of procurement. To improve decision making, we are 

recommending that the Navy conduct a risk assessment and consider the 

results before committing to buy LCS ships in order to link procurement 

with evidence that the Navy is progressing in its ability to implement its 

new operational concepts. DOD partially agreed with our recommendation 

stating that it agrees such risk assessments are appropriate and should be 

conducted. However, DOD also stated that the acquisition strategy has 

changed from annual procurements to buying LCS ships in fiscal years 

2010, 2012, and 2015 and proposed reviewing the risk assessments at these 

intervals. We believe that DOD’s proposal meets the intent of our 

recommendation but emphasize that, given the new acquisition approach, 

it is even more important to conduct the risk assessment and consider the 

results before making procurement decisions since the department will be 

committing to several ships in each of the years cited and there will be a 

gap of several years between each procurement decision. A more detailed 

discussion of DOD’s comments and our responses to these comments 

follow the Recommendations for Executive Action section of this report. 

 

9

 Department of Defense, National Defense Strategy (June 2008). 

Page 6 GAO-10-257 Littoral Combat Ship
 

Background 

Program Description The LCS is being developed to assure access to the littorals that are 

threatened from mines, submarines, and surface forces. The LCS program 

consists of two distinct parts, the ship itself—called a seaframe—and the 

mission package it carries and deploys to provide combat capability. In 

addition to the capabilities associated with the mission packages, the LCS 

may be expected to perform inherent capabilities such as homeland 

defense, search and rescue, or humanitarian assistance. The Navy is using 

two contractors to build differently designed seaframes. As of December 

2009, the Navy had bought two ships of each design, of which the first ship 

of each design has been delivered. The Navy plans to select one design in 

fiscal year 2010 for the remainder of the class. Figure 1 shows each of the 

seaframes. 

Figure 1: Two Littoral Combat Ship Seaframes 

Source: The Navy.

USS Freedom (LCS 1) USS Independence (LCS 2) 

By the end of fiscal year 2015, the Navy plans to have bought up to 23 of 

the planned 55 ships. These ships represent a significant investment in the 

LCS program not only for procurement but also for long-term operating 

and support costs. A weapon system’s life-cycle costs include research and 

development, procurement, military construction, operations and 

Page 7 GAO-10-257 Littoral Combat Ship
 

support,10 and disposal. Since operating and support costs are historically 

the largest portion (over 70 percent) of a weapon system’s lifetime costs, 

these costs were the focus of our analysis of the Navy’s LCS cost 

estimates. 

The LCS seaframe’s combat capability will be provided by one of three 

interchangeable mission packages. Each mission package will also include 

an aviation detachment of manned helicopters and unmanned aerial 

vehicles. Currently the Navy plans to buy 64 mission packages for three 

mission areas—24 for mine countermeasures, 16 for antisubmarine 

warfare, and 24 for surface warfare. The surface warfare mission package 

also includes a module for maritime security, primarily to provide 

capability for boarding other ships. The Navy has not yet decided how 

many maritime security modules it will buy.11 Table 1 below describes the 

basic mission of each mission package. 

Table 1: Description and Quantity of LCS Mission Packages 

Mission package Planned quantity Package mission 

Mine Countermeasures 24 Detect and neutralize mines 

Anti-submarine Warfare 16 Detect submarines and protect 

forces in transit 

Surface Warfare 24 Detect, track and engage small boat 

threats 

Source: GAO analysis of Navy information. 

The Navy plans to incrementally add capability to these packages over 

time, and, according to Navy officials, may develop additional mission 

packages as needed. 

 

10 Operating and support costs are the resources required to operate and support a weapon 

system and include maintenance of equipment/infrastructure, operations of forces, training 

and readiness, base operations, personnel, and logistics. 

11 Although the Navy reported to congress that its objective is to buy 55 maritime security 

modules, Navy officials stated that future analysis could result in the Navy actually buying 

fewer of these modules. Naval Sea Systems Command, Program Executive Officer for 

Littoral and Mine Warfare, Report to Congress: Littoral Combat Ship Mission Packages, 

(Washington, D.C.: May 2009). 

Page 8 GAO-10-257 Littoral Combat Ship
 

Rotational Crewing for 

LCS 

The Navy intends to rotationally crew LCS to enable each seaframe to 

remain deployed for up to 18 months. The Navy plans to have four crews 

for every three ships with one of the three ships being deployed at any one 

time. Since the LCS crew is smaller than the crews on many other surface 

ships, the Navy plans to rotate the core crews after about 4 months (117 

days) to help reduce crew fatigue. During the 2-week turnover period, the 

crews and contractors will perform preventive and corrective 

maintenance and resupply the ship. Navy officials stated that one benefit 

to having more crews than ships is that the Navy is able to quickly replace 

a deployed crew member who becomes sick or injured with a comparably 

trained sailor. The primary benefit of rotational crewing will be the ability 

to maintain a deployed seaframe for up to 18 months continuously while 

allowing the crews to relieve one another and return to their homeport 

without undue hardship. The seaframes would be rotated every 18 

months with a 30-day overlap period. 

Navy Organizations Are 

Intended to Monitor 

Development of and 

Resolve Implementation 

Issues with the LCS 

Concept of Operations 

Given the challenges in implementing new concepts for personnel, 

training, and maintenance, the Navy established several groups to identify 

and resolve challenges it faces. These groups include an Oversight Board, 

a Council of Captains, and two cross-functional teams. These groups are 

comprised of members from across the Navy and, collectively, these 

groups identify and review issues and barriers to implementing the LCS 

concepts articulated in the Wholeness Concept of Operations and work 

together to jointly develop solutions. 

• Oversight Board: The board is chaired by the Commander Naval Surface 

Forces and the membership includes executive-level representatives from 

program executive offices, program sponsors, and other major 

stakeholders from across the Navy. The board is supported by a senior 

executive-level working group called the Council of Captains. The board 

meets quarterly to consider key issues that require high-level decisions. 

For example, issues discussed this past year included the need to support 

development of distance support capabilities, and the need to fund 

aviation crews for the detachments that will support LCS operations. 

• Cross functional teams: Two cross functional teams support the Oversight 

Board—one focused on manning and training issues and the other focused 

on maintenance and logistics issues. For example, the manning and 

training team is working on issues such as upgrading the shore-based 

trainers and the need to determine the appropriate level of shore support 

personnel. Also, the maintenance and logistics team has raised issues, 

such as remotely monitoring the condition of ship systems and funding for 

distance support development. 

Page 9 GAO-10-257 Littoral Combat Ship
 

In addition, the LCS Program Office, an office within the Naval Sea 

Systems Command, chairs the Risk Management Board. The board’s work 

is predominately contained within the LCS Program Office and focuses on 

identifying, measuring, and mitigating technical, schedule, and cost risks. 

Navy officials stated that the board differs from the other groups in that 

the risks it manages are almost exclusively focused on development and 

production—issues within the program office’s control. The few 

operationally related risks that the board has identified to date include: 

personnel operating the launch and recovery equipment, personnel 

transporting supplies on board, potential for increased crew fatigue 

caused by the ship’s motion, and crew training. According to Navy 

officials, the mitigation for the training issues is the ongoing study to 

develop a long-term LCS training plan and the mitigation for the personnel 

issues is to observe and learn from the ongoing test and trials period and 

initial deployments and then make adjustments, if needed. 

The Navy’s Operating 

and Support Cost 

Estimates Do Not 

Fully Reflect Best 

Practices and May 

Change Due to 

Program 

Uncertainties 

The Navy Estimated 

Operating and Support 

Costs for the LCS Program 

The Navy has estimated operating and support costs that include most 

elements of the LCS program.12 Our analysis of the Navy’s 2009 estimates 

showed that the operating and support costs for the planned seaframes 

and mission packages could total $84.8 billion which amounts to about 

 

12 Due to the upcoming decision to select one of the two seaframes that the Navy will buy 

for the remainder of the program, the details of the Navy’s estimates are considered 

business sensitive. 

Page 10 GAO-10-257 Littoral Combat Ship
 

$61.7 million per seaframe annually to operate and support both the 

seaframes and mission packages.13

For the seaframes, the Navy’s 2009 estimate of operating and support costs 

projected a total of $64.1 billion based on a 25-year service life.14

According to Navy officials, this estimate assumed a nearly even split o

the two seaframe types as the seaframes have different operating and 

support cost profiles. However, the Navy has announced that it will 

choose one of the two seaframe designs in 2010 so the associated 

operating and support costs will likely change depending o

f 

n the design 

selected. 

.8 

ed 

te to calculate the operating and support costs for this 

ission package. 

 

For the mission packages, operating and support costs could total $20

billion. The Navy provided us with its estimate of the average annual

operating and support costs of each mission package. Therefore, to 

calculate the total operating and support costs, we multiplied the average 

annual estimates by the number of packages of each type with an expect

30-year service life. The Navy’s most recent estimates were prepared to 

support the fiscal year 2010 budget but did not include the antisubmarine 

package since its contents are under development; therefore, we used the

prior year’s estima

m

 average annual operating and support cost by dividing the $84.8 billion by 

 seaframes and the expected seaframe service life. 

ice 

13 Since significant LCS operational capabilities are derived from the mission packages—

the ability to counter mines, submarines, and small surface boats, and to conduct maritime 

security operations—and since the mission packages are part of the LCS program, we 

calculated the

the number of

14 The Navy can expect to pay operating and support costs until the last LCS is retired. 

Therefore, if the last LCS is purchased in 2025, then, based on the 25-year expected serv

life of each seaframe, the Navy could expect to pay operating and support costs through

about 2050. 

Page 11 GAO-10-257 Littoral Combat Ship
 

Although the Navy has estimated operating and support costs, we found 

 best practices for cost estimating,15 a credible 

• d, 

• key 

•

such 

as personnel, maintenance, and sustaining support—and documented 

d 

e 

he 

ysis, 

e 

 of the systems. 

According to best practices, a credible cost estimate should include a risk 

analysis that shows the range of possible costs and the likelihood that 

costs could increase to particular levels. The results of a risk analysis are 

usually shown in a cumulative probability distribution or “S-curve.” Figure 

2 below shows a notional example of an S-curve. 

 

that the Navy had not fully implemented cost estimating best practices. 

According to DOD and GAO

cost estimate should include the following three steps: 

analyze the likelihood that the costs could be greater than estimate

assess how the cost estimate may change in response to changes in 

program assumptions, and 

compare the estimate to an independently developed estimate. 

The Navy’s estimates showed some aspects of a high-quality cost 

estimating process. For example, the estimates included most cost 

categories recommended by DOD’s cost estimating best practices—

ground rules and assumptions, methodologies, and data sources. However, 

our assessment of the Navy’s operating and support cost estimates showe

that the Navy did not take two of the three steps listed above to ensure th

estimates’ credibility, and only partially completed the other step. 

First, the Navy did not perform an analysis to assess the likelihood that t

operating and support costs for either the seaframe or mission packages 

could be greater than estimated. This analysis, known as a risk anal

estimates the likelihood that operating and support costs could ris

beyond what was projected and the degree of the possible increase. We 

reported in 2009 that out of 10 of DOD’s largest acquisition programs, 5

had increased overall acquisition costs from their first full cost estimate.16

Of those that didn’t, three programs sharply reduced procurement 

quantities, and unit costs increased for all but one

15 Office of the Secretary of Defense, Cost Analysis Improvement Group, Operating and 

Support Cost Estimating Guide, (Arlington, Va., October 2007), Office of the Secretary of 

Defense, Cost Analysis Improvement Group, Operating and Support Cost Estimating 

Guide (Arlington, Va., May 1, 1992), and GAO, GAO Cost Estimating and Assessment 

Guide, GAO-09-3SP (Washington, D.C.: March 2009). 

Operating and Support 

Cost Estimates Do Not 

Fully Reflect Best 

Practices 

16 GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-09-326SP 

(Washington, D.C.: Mar. 30, 2009). 

Page 12 GAO-10-257 Littoral Combat Ship
 

Figure 2: Notional Example of Risk Analysis Results Displayed in an S-curve Showing the Range and Likelihood of Possible 

Cost Increases 

Source: GAO analysis. 

Increasing costs

Probability of occurrence (percentage) 

85 percent probability

50 percent probability

0

20

40

60

80

100

This notional example shows that the higher the cost estimate, the greater 

the probability that actual costs will not exceed the estimate. Navy 

guidance indicates that the confidence level of a program’s cost estimate 

should be above 85 percent to merit a “green” or low-risk designation and 

that a confidence level of less than 60 percent merits a “red” or high-risk 

designation.17 The Weapon Systems Acquisition Reform Act of 2009 

 

17 Naval PoPS Criteria Handbook, A Program Health Assessment Methodology for Navy 

and Marine Corps Acquisition Programs (September 2008), issued by the Assistant 

Secretary of the Navy for Research Development and Acquisition. 

Page 13 GAO-10-257 Littoral Combat Ship
 

requires that the confidence level—usually developed based on an analysis 

of the likelihood that costs will be greater than estimated—for cost 

estimates be disclosed and, if less than 80 percent, justified.18 Navy cost 

estimating officials told us that they have not yet decided what confidence 

level they will use for the operating and support cost estimate prepared for 

the next milestone decision point. Since the Navy has not performed this 

risk analysis, neither the Navy nor DOD decision makers have a full 

picture of the range of possible operating and support costs and the 

likelihood of costs increasing beyond the estimates discussed above. 

Second, according to DOD and GAO best practices, a credible cost 

estimate should include an assessment of how the cost estimate may 

change in response to changes in key program assumptions. This is known 

as a sensitivity analysis of cost drivers. Such an analysis helps decision 

makers identify areas that could significantly affect a program’s cost, 

choose between program alternatives, and mitigate risks. Cost drivers 

could include operational plans and assumptions such as crew size, 

maintenance plans, or the system’s expected useful life. The Navy has 

identified several cost drivers for the LCS program, including fuel, 

manning, maintenance, and infrastructure. However, to date the Navy has 

only completed analysis of one of these cost drivers—fuel—and, officials 

said, is conducting analyses of other areas such as manning and 

maintenance. Without a more complete identification and analysis of key 

cost drivers, the Navy may not have a complete picture of how changes in 

program operations or assumptions could affect operating and support 

costs. 

Third, according to DOD and GAO best practices, a credible cost estimate 

should be developed and compared to an independently developed cost 

estimate. DOD and Navy guidance require that an independent life-cycle 

cost estimate, including an estimate of operating and support costs, be 

completed for a shipbuilding program at the program’s Milestone B 

decision point, when lead and initial follow-on ships are normally 

 

18 Pub. L. No. 111-23, §101(2009), codified at 10 U.S.C. §2334 (d). Specifically, the law 

requires the Director of Cost Assessment and Program Evaluation, as well as the Secretary 

of the military department concerned to each disclose the confidence level used in 

establishing a cost estimate for a major defense acquisition program, the rationale for 

selecting such confidence level, and, if such confidence level is less than 80 percent, the 

justification for selecting a confidence level of less than 80 percent in certain 

documentation specified in the statute. 

Page 14 GAO-10-257 Littoral Combat Ship
 

approved, and at the Navy’s internal review, referred to as Gate 4,19 which 

occurs just before Milestone B. As the LCS program has not gone through 

Milestone B, no independent life-cycle cost estimate has been performed 

for the LCS program. Specifically, neither the Naval Center for Cost 

Analysis nor the Office of the Secretary of Defense’s Office of the Director 

of Cost Assessment and Program Evaluation (CAPE) has developed an 

independent estimate of LCS operating and support costs according to 

Navy and CAPE officials. Independent cost estimates are one of the best 

and most reliable methods of validating a cost estimate. Past experience 

has shown that an independent estimate, prepared by an entity separate 

from those connected to the program, tends to be higher and more 

accurate than estimates developed by a system’s program office. In a 

previous review of DOD acquisition programs, we found that 19 of 20 

independent estimates developed by CAPE were higher than the service 

estimate. Even so, some of the CAPE’s estimates understated actual 

program costs.20

In addition, two other important elements of a cost estimate were omitted 

from the documentation the Navy provided to us on the mission package 

operating and support costs prepared in July 2009. First, Navy officials 

told us that they had not updated and therefore did not include the 

estimate for the antisubmarine package because the contents are under 

development.21 However, the Navy plans to buy 16 of these packages. 

According to DOD and GAO best practices, cost estimates should be 

complete and account for all possible costs. Further, the Navy did not 

show total lifetime operating and support costs or costs expected in each 

year of the program—instead, the Navy only showed average annual 

mission package operating and support costs. Showing cost estimates for 

each year of the program, known as time phasing, is also a best practice 

and necessary for use in the formulation of and comparison with actual 

program budgets. 

 

19 The internal Navy review that occurs just prior to the second DOD milestone decision 

point is known as the Gate 4 review. Secretary of the Navy Instruction 5000.2D, 

Implementation and Operation of the Defense Acquisition System and the Joint 

Capabilities Integration and Development System, paragraph 2.5.5.5 and Annex 20A (Oct 

16, 2008). 

20 GAO, Defense Acquisitions: A Knowledge-Based Funding Approach Could Improve 

Major Weapon System Program Outcomes, GAO-08-619 (Washington, D.C.: July 2, 2008). 

21 Our analysis of the mission package operating and support costs used the Navy’s 2008 

estimate of the annual operating and support costs for the antisubmarine package. 

Page 15 GAO-10-257 Littoral Combat Ship
 

The Navy has not yet decided which one of the two LCS seaframes it will 

buy for the remainder of the program, leading to uncertainty about the 

effects of this program decision on the operating and support cost 

estimates developed to date. Also, the Navy has not yet decided what it 

will do over the long term with the two ships of the design that is not 

chosen. The Navy currently plans to deploy these two ships as they 

become available, according to Navy officials. Since the two designs will 

require separate training facilities and core crew, and since each design 

has unique equipment and therefore different maintenance requirements, 

continuing to support both designs may carry a cost premium. Likewise, 

deciding which one of the two LCS seaframes to buy is likely to, in turn, 

affect decisions on issues such as infrastructure and training requirements, 

with accompanying cost implications. 

Operating and Support 

Cost Estimates Are Likely 

to Change Due to Program 

Uncertainties 

The Navy’s force structure analyses supporting the planned purchase 

quantities of mission packages are incomplete, adding to uncertainty 

about costs in future budget years. Our prior work has shown that a 

knowledge-based decision-making process can help provide a 

comprehensive analytic basis for an acquisition program, including 

determining the optimum quantities of LCS seaframes and mission 

packages.22 This information in turn can help decision makers evaluate the 

affordability of the LCS program and establish funding priorities. Navy 

officials from two divisions within the Office of the Chief of Naval 

Operations—the Surface Warfare Division and the Assessments Division—

said they were unaware of any analysis supporting the total planned 

quantities for either the surface warfare package or its maritime security 

module. Also, Navy officials said that the Navy has not performed a force 

structure analysis on the antisubmarine package because the contents are 

under development. The Navy has not performed a complete analysis of 

LCS seaframe and mission package quantities because certain information 

needed for the analyses was not yet available, including decisions on 

potential changes to program operating assumptions and requirements. 

Further, an analysis of LCS seaframe and mission package quantities is not 

included in the Assessments Division’s fiscal year 2010 agenda. 

 

22 GAO, Missile Defense: DOD Needs to More Fully Assess Requirements and Establish 

Operational Units before Fielding New Capabilities, GAO-09-856 (Washington, D.C.: Sept 

16, 2009). GAO, Defense Acquisitions: A Knowledge-Based Funding Approach Could 

Improve Major Weapon System Program Outcomes, GAO-08-619 (Washington, D.C.: July 2, 

2008), and GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-08-467SP (Washington, D.C.: Mar. 31, 2008). 

Page 16 GAO-10-257 Littoral Combat Ship
 

The planned force structure of 55 LCS seaframes is based on a 2005 

analysis of requirements for responding to possible overseas conflicts and 

meeting overseas presence requirements, which officials said they 

revalidated in 2007 and 2008. However, this analysis is based, in part, on 

certain assumptions that are not yet verified. For example, one assumption 

is that rotational crewing plans will work as expected, allowing a greater 

presence per ship than the traditional one crew per ship. However, 

rotational crewing has never been routinely conducted by the Navy for an 

entire class of surface combatants. If the Navy switches to a different 

crewing model, a different number of ships could be required to sustain 

the same presence, or alternatively, a different number of crews could be 

required. The expected purchase of 55 seaframes is also based on an 

assumption that some ships would be homeported overseas, according to 

Navy officials. If the assumed number homeported overseas changes, then 

the number of LCS needed to maintain the same presence requirements 

could also change. If these assumptions change due to program decisions 

or operating experience, the total number of LCS seaframes needed to 

meet requirements may change. It may be important for Navy and DOD 

decision makers to have updated and complete force structure analyses 

for the LCS program since any changes to the planned purchase quantities 

as a result of updated force structure analyses would affect the program’s 

total operating and support costs. Without such analyses, decision-makers 

may not be able to effectively evaluate the affordability of the program. 

Finally, the LCS cost estimates could change as actual operating data 

become available and operational concepts are refined. Since little actual 

LCS operating and support data are available to date, the estimates are 

currently based on data from other systems, and the estimates could 

change as actual cost data become available. The cost estimates are also 

based on new operational concepts for personnel, training, and 

maintenance. These new concepts are not fully developed, tested, and 

implemented, and, if these concepts change, the estimates could change. 

For example, the Navy has not yet fully developed or implemented a 

comprehensive training plan, and it is possible that the plan could cost 

more or less than the training costs accounted for in the current estimates. 

Upcoming Program 

Decisions Would Benefit 

from Further Analysis of 

Long-Term Operating and 

Support Costs 

Decision makers could benefit from further analysis of the program’s longterm operating and support costs before making key program and 

investment decisions. Since operating and support costs constitute a major 

portion of system life-cycle costs—over 70 percent—they are critical to 

the evaluation of acquisition alternatives. Navy officials told us that they 

are developing criteria for selecting one seaframe for the remainder of the 

Page 17 GAO-10-257 Littoral Combat Ship
 

program; however, at this time it is not clear that the criteria will include a 

comparison of the operating and support costs of each seaframe or 

whether the estimates will be developed according to all three steps for 

ensuring credibility and the results presented to decision makers in the 

Navy and DOD. 

According to DOD and GAO best practices for cost estimating, decision 

makers should consider affordability at major decision points, and a 

comparative analysis should be done to identify costs and benefits of 

competing alternatives, including an operating and support estimate of 

each alternative.23 The lack of cost estimates that fully meet best practices, 

such as including an analysis to assess the likelihood that costs will be 

greater than estimated, raises questions about the credibility of the 

estimates that have been produced to date and limits the ability of decision 

makers to make fully informed program and investment decisions, such as: 

• accurately assessing the affordability of LCS within the broader portfolio 

of Navy and DOD programs, 

• identifying the resources needed over the long term to support the planned 

investment in the LCS force structure, 

• assessing the long-term cost implications of alternative acquisition 

strategies such as which seaframe the Navy will buy for the remainder of 

the 55-ship class, and 

• analyzing the costs of options for what to do with the two seaframes of the 

design that is not selected. 

According to DOD acquisition guidance, at the Milestone B decision point 

lead and initial follow-on ships are normally approved and an independent 

life-cycle cost estimate for the program, including operating and support 

costs, is required.24 The Milestone B decision point for the LCS program 

has been delayed several times. Originally scheduled for January 2007, 

Navy officials now say they plan to hold the milestone in May or June 

2010. 

 

23 Office of the Secretary of Defense, Cost Analysis Improvement Group, Operating and 

Support Cost Estimating Guide, (Arlington, Va., October 2007), and GAO, GAO Cost 

Estimating and Assessment Guide, GAO-09-3SP (Washington, D.C.: March 2009). 

24 Department of Defense Instruction 5000.02, Operation of the Defense Acquisition 

System (Dec. 8, 2008). 

Page 18 GAO-10-257 Littoral Combat Ship
 

According to Naval Sea Systems Command officials, the Navy plans to 

develop a life-cycle cost estimate including operating and support costs 

and have an independent cost estimate prepared by CAPE to support the 

program’s Milestone B decision in May or June 2010. Navy officials told us 

they plan to complete the other two steps for a credible estimate—

analyzing the likelihood that costs will increase over time, and fully 

assessing the effects of changing key program assumptions—at Milestone 

B. However, Navy officials said that this information may not be presented 

to top decision makers in the Navy and DOD, and therefore may not 

inform key program decisions such as the decision of which seaframe to 

buy for the remainder of the program. Further, congressional decision 

makers may not be fully aware of the LCS program’s operating and 

support costs since, to date, the LCS Selected Acquisition Reports 

submitted to Congress have not included operating and support cost 

estimates.25 Operating and support costs are required to be included in 

such reports for programs that have passed Milestone B26 and, as 

previously noted, the LCS program has not yet passed that point. Without 

the benefit of current, credible estimates of the long-term operating and 

support costs, congressional decision makers may not be fully aware of 

the resources that will be needed over time to support the ships for which 

DOD requests funds to buy each year. 

 

25 Section 2432 of Title 10 of the U.S. Code requires the Secretary of Defense to submit 

selected acquisition reports to Congress on current major defense acquisition programs. 

26 Section 2436 of Title 10 of the U.S. Code requires that selected acquisition reports for the 

first quarter of a fiscal year, called comprehensive selected acquisition reports, include a 

full life-cycle cost analysis for each major defense acquisition program. A full life-cycle cost 

analysis is required in the second, third, and fourth quarters of a fiscal year if a major 

defense acquisition program was not included in the most recent comprehensive selected 

acquisition report. 

Page 19 GAO-10-257 Littoral Combat Ship
 

The Navy Has Made 

Progress but Faces 

Risks in Implementing 

Its Plans to Operate 

and Support LCS 

The Navy Faces Risks in 

Implementing Its 

Personnel Plans over the 

Long Term 

Although the Navy is conducting studies to determine personnel 

requirements for LCS, it has not fully identified the number of ship and 

shore support personnel required to support LCS over the long term and 

faces risks in its ability to identify and assign personnel over the long term. 

Additionally, the Navy has not routinely rotationally crewed an entire class 

of surface combatants; therefore, the concept being planned for the LCS 

class is unproven. Although the Navy rotationally crews some small ships, 

such as the mine countermeasure ships, the Navy has only experimented 

with rotationally crewing surface combatants such as destroyers and only 

did so for a short time.27

The current Navy plan for a 40-person core crew has not yet been 

validated by an analysis of the crew’s expected workload. Early Navy 

estimates indicated that the core crew might need to be more than 40 to 

mitigate a concern that a crew this small could experience fatigue. For 

example, one study raised the issue that crew fatigue could affect missions 

which could be mitigated by temporarily augmenting the crew or 

modifying how missions are conducted. The 40-person core crew size was 

based upon the results of a 2005 conference to explore options for 

reducing the size of the core crew, which was not the typical workload 

analysis. The Navy’s Manpower Analysis Center typically conducts 

analyses of a ship’s workload to determine the number and type of 

personnel required to complete all operational and maintenance tasks. 

However, this analysis for the LCS core crew and the three mission 

packages is not scheduled to be complete until after the first full 

deployment, around fiscal year 2014.28

 

27 GAO, Force Structure: Ship Rotational Crewing Initiatives Would Benefit from TopLevel Leadership, Navy-wide Guidance, Comprehensive Analysis, and Improved 

Lessons-Learned Sharing, GAO-08-418 (Washington, D.C.: Mar. 29, 2008). 

28 Navy officials stated that they had not yet been directed to include an analysis of the 

maritime security module of the surface warfare package. 

Page 20 GAO-10-257 Littoral Combat Ship
 

The Navy’s initial analysis to identify shore personnel requirements is due 

by the end of 2009; however, the full requirements for shore personnel 

may not be known for several years. Due to the limited crew size, many 

administrative and maintenance duties will have to be performed ashore 

rather than on board as on other surface ships and will be managed by 

LCS squadrons. 29 Navy officials estimated that the number of people 

needed in a squadron organization to manage and support 12 to 15 LCSs 

might be about 170. The LCS squadrons are likely to be larger than 

squadrons for other surface ships since their responsibilities for the level 

of shore-based support required for the small core crew will be greater. 

However, Navy officials said that they will not know how large the LCS 

squadrons should be until they have experience with supporting deployed 

ships. In addition, the shore support personnel required will be affected by 

outstanding decisions, such as where to homeport the ships and the longterm maintenance strategy. Since the Navy has not yet completed its 

studies to identify the LCS personnel requirement, we compiled Navy 

estimates of the personnel that may be required to support LCS over the 

long term. Specifically, we added Navy estimates of the personnel that 

may be required for the ship crews, mission package crews, and the LCS 

squadrons to derive a total number of personnel that may be required for 

the program. Table 2 below shows that the total personnel required for the 

LCS program over the long term might be approximately 4,600 people. 

Table 2: Estimate of the Total Navy Personnel Required for a Fleet of 55 LCS Ships 

Estimate of Navy personnel requireda

Ship crews 2,880

Mission package crewsb888c

LCS squadrons (ashore) 680 to 850 

Total personnel required 4,448 to 4,618

Source: GAO compilation of Navy data. 

a

The personnel estimate is for Navy personnel only and does not include contractor personnel who 

are currently performing most maintenance. 

 

29 The LCS Class Squadron coordinates all shore support and is responsible for the 

overarching management of seaframes, mission packages, and personnel. The Navy plans 

to establish several numbered squadrons to manage the day-to-day details of 

administrative, personnel, operational, maintenance, distance support, logistics, and 

training functions for a specific number of LCSs. 

Page 21 GAO-10-257 Littoral Combat Ship
 

b

The total number of personnel for mission package crews includes personnel for three types of 

mission packages—mine countermeasures, antisubmarine warfare, and surface warfare. Currently, 

additional personnel are required to support maritime security operations. The Navy is reviewing 

options for providing personnel using existing personnel. However if additional personnel are 

required for each maritime security module, the additional personnel could total up to 432. 

c Navy officials stated that there is a proposal to reduce the number of mission package crews for 

antisubmarine warfare, mine countermeasures, and surface warfare. If approved, the total number of 

personnel for mission package crews could decrease to 465. Also, if the Navy decides to use 

personnel from the other warfare packages, the total number of personnel for mission packages could 

also decrease. 

The above estimate of the total personnel required does not include 

aviation crews, which could total an additional 1,656 people. We did not 

include aviation crew personnel in the table because these crews are not 

totally dedicated to LCS and may be tasked to support other ship types, 

according to Navy officials. The Navy has the core and mission package 

crews in its personnel plans, but to date has not funded all the aviation 

crews. According to Navy officials, if the aviation crews are not funded in 

the Navy’s fiscal year 2012 budget, then the Navy may begin to experience 

shortfalls in aviation crews beginning in fiscal year 2014. 

The Navy also faces risks in its ability to identify and assign personnel to 

LCS over the long term due to the requirement for relatively senior, highly 

trained personnel. Specifically: 

• LCS sailors must be experienced sailors and positions must be filled by a 

person of the exact pay grade required, which could limit the pool of 

personnel available. Sailors must also commit to serving on an LCS crew 

for 36 months after completing their LCS training. Considering the concept 

for rotational crewing, a sailor might serve two or three 4-month 

deployments during their 36-month LCS tour for a total of 8 to 12 months 

of LCS deployment time. 

• The number of requirements that potential sailors must meet in order to 

qualify for an LCS assignment is rigorous. For example, potential LCS 

sailors must meet current physical fitness standards as well as have 

passed the previous 18 months of physical fitness assessments. In 

contrast, sailors are considered qualified for assignment on other surface 

ships if they passed the most recent physical fitness test. Also, sailors will 

not be considered for assignment to LCS if they are color blind or have a 

pending application for the officer commissioning program. 

• Due to the longer training time required to prepare LCS sailors, the Navy’s 

Personnel Command must identify personnel 18 to 24 months prior to 

when they need them to report to the LCS crew. For other surface ships, 

the Personnel Command needs to identify personnel only 5 to 9 months 

ahead of time. Personnel Command officials stated that they must 

manually identify the personnel for LCS since the computer system 

Page 22 GAO-10-257 Littoral Combat Ship
 

normally used to identify personnel can only identify personnel up to12 

months in advance. Due to the increased workload resulting from the 

manual process, the Navy Personnel Command has set up a separate office 

specifically to handle LCS personnel assignments and added eight 

positions. Officials stated that they will likely need more personnel as 

more ships and mission packages enter service. Since the average annual 

turnover rate is about one-third, according to Navy officials, the Personnel 

Command will have to manually identify a significant number of 

replacement sailors each year to support the LCS program. 

The Navy Faces Risks in 

Achieving the Extensive 

LCS Training 

Requirements 

The Navy has made progress in identifying LCS-unique training 

requirements, but faces risks in implementing its training concept. 

According to the Navy’s concept for LCS,30 sailors must be ready to 

perform their duties when they arrive on board without additional 

supervised, on-the-job training that is typical of other surface ships. The 

Navy calls this the “train to qualify” standard. In contrast, it is typical on 

other ships for a sailor to complete his or her training on board via 

supervised, on-the-job training. According to Navy officials, it may take 

about 6 months of onboard on-the-job training for a sailor on other surface 

ships to reach the same level of proficiency as that described in the 

concept for LCS sailors. The Navy’s approach to LCS training is different 

than for other surface ships since the small LCS crew size means that 

there is little capacity on board for supervised training and no training 

group on board the ship as is typical of other surface ships. LCS sailors 

will also be required to be trained in several skill areas outside their 

primary specialty. For example, an LCS Damage Control Assistant will also 

have to train in an engineering skill area and an Electronics Technician 

will also have to train in a Fire Controlman skill area. In addition, LCS 

sailors will be expected to perform various collateral duties, such as 

serving as the crew’s barber and running the ship’s store. 

The Navy expects to complete a study of LCS training by the end of 2009 

but may not fully implement the results for several years. The Navy began 

this study to fully identify LCS training requirements and to recommend 

alternatives for providing training over the life of the LCS program. This is 

a complex process since training requirements for the core crew are 

unique for each position on the two seaframes. Although the Navy has 

identified LCS-specific training requirements for both seaframes and the 

 

30 U.S. Fleet Forces Command, Littoral Combat Ship Platform Wholeness Concept of 

Operations (Revision C) (Sept. 24, 2009). 

Page 23 GAO-10-257 Littoral Combat Ship
 

three mission packages, the Navy has not yet completed plans for how to 

provide this training over the long term. Further, the training plan resulting 

from the Navy’s LCS training study may not be fully implemented until 

about 2013 or after, largely due to the need to develop and buy simulators 

and virtual training facilities. Depending on homeporting decisions, the 

Navy may need to build comparable simulators on the east coast as well as 

the west coast. Although the Navy has built one shore-based trainer for 

each seaframe, the trainers will need to be upgraded in accordance with 

the training study results and to meet the train-to-qualify standard. Until 

the results of the training analysis are implemented, the Navy has 

developed an interim solution, called the LCS Academy, to provide LCSspecific training and fill training gaps. 

Another reason the training required prior to the sailor coming on board 

the LCS is longer and more extensive than for other surface ships is that 

the training requirements include courses outside of the sailor’s primary 

specialty. To assess the training requirements for LCS versus other surface 

ships, we compared the training days required before a sailor reports to an 

LCS crew to the training days required before a sailor reports to other 

types of surface ships.31 Our analysis of a sample of LCS positions showed 

that the number of training days required before an LCS sailor reports to 

the crew is significantly longer than for sailors in comparable positions on 

other ships—an average of 484 days versus 126 days for an amphibious 

transport docking ship and 103 days for a destroyer.32 The lowest number 

of training days required for an LCS position in our sample was 264 and 

the highest was 832. Figure 3 below shows the average number of training 

days for the positions in our sample on a typical destroyer, amphibious 

transport docking ship, and the LCS. 

 

31 To do the analysis, we identified a non-probability sample of 15 enlisted positions from 

the 40-person LCS core crews of both seaframes. The sample was based on identifying LCS 

positions that were critical or required cross-training. Next, we compared the training days 

required before reporting on board for comparable positions on other surface ships. See 

appendix I for a complete description of the analysis methodology including a discussion of 

the sample selection criteria. 

32 Navy officials noted that some positions on an Aegis ship also have lengthy training 

requirements, such as training for sailors who work on the Aegis radar. Since this type of 

equipment is not on LCS, the related positions were not part of our sample. 

Page 24 GAO-10-257 Littoral Combat Ship
 

Figure 3: Comparison of Average Training Days Required before Reporting on 

Board for LCS with Two Other Surface Ships for a Sample of Positions 

0 250 500

Average

training days

LCS

Destroyer

Amphibious Transport Dock Ship

Source: GAO analysis of Navy data.

Training periods

Total training days

As noted above, a sailor on ships other than LCS may spend an additional 

6 months completing training on board via supervised, on-the-job training. 

Therefore, even accounting for this time, the LCS training time required is 

significantly higher. Implementing the LCS concept of train-to-qualify has 

two important effects. First, the costs to train sailors before they report to 

an LCS crew are likely to be significantly higher than for other surface 

ships due to the longer training time required before the sailors report to a 

crew and due to the costs to build and sustain the shore-based training 

facilities. Second, the longer training time before reporting to a crew is the 

major reason that the Personnel Command has to identify people 18 to 24 

months before they report to an LCS crew, which Navy documents have 

indicated may be unsustainable using the current personnel distribution 

system. 

The Navy Faces Risks in 

Implementing Its 

Maintenance Concept 

The Navy also faces risks in implementing the maintenance concept being 

developed to allow for a small assigned crew. Performing preventive 

maintenance is an important factor in maintaining the material condition 

of the ship. According to the Navy’s Board of Inspection and Survey, 

deferred maintenance was a key factor in some surface ships having 

significant material problems identified during recent inspections.33 The 

risks for LCS are in preventive maintenance—periodic tasks to keep 

equipment in good condition—and distance support—moving work from 

 

33 Navy Board of Inspection and Survey, 2008 INSURV Annual Report (undated). 

Page 25 GAO-10-257 Littoral Combat Ship
 

the ship to the shore. Regarding preventive maintenance, the Navy is still 

assessing how much preventive maintenance the core crew can 

accomplish. Due to the small core crew size, a significant amount of 

maintenance has to be moved off ship. The initial analysis was that 20 to 

30 man-years of preventive maintenance would have to be moved off of 

the ship. According to the Navy’s LCS concept, the core crew is expected 

to do little or no corrective maintenance and minimal preventive and 

facilities maintenance.34 The rest would be done during in-port periods—

by the crew or contractors—or by teams that fly out to the ship to perform 

maintenance during crew turnover periods. As of October 2009, Navy 

officials stated that well over 50 percent of the preventive maintenance 

had been transferred from the ship to the shore and is being accomplished 

by contractors under the interim support plan agreement. In contrast, on 

other surface ships, the crew performs all preventive maintenance and 

much corrective maintenance that involves diagnosing problems and 

completing somewhat complex repairs. During fiscal year 2009, the Navy 

spent $6.0 million on the interim support plan for seaframe preventive and 

facilities maintenance. The Navy is also still working to resolve issues in 

the system developed for LCS to schedule and track accomplishment of 

preventive maintenance. 

The Navy also faces risks in implementing its plans for distance support. 

Distance support is a key enabler for supporting LCS and requires the 

capability to move information to and from the ship. Although other ships 

in the Navy rely to some extent on distance support, Navy officials stated 

that distance support is critical to enabling LCS to operate as envisioned in 

the operational concept due to the small crew size. According to the 

concept, many administrative functions are also planned to be moved 

ashore such as postal, administrative records, logistic support, and 

maintenance and fuel records. Commander, Naval Surface Forces 

established LCS distance support requirements in April 2009, which 

included developing the capability to move the workload for 120 processes 

from the ship to the shore. Navy officials stated that they are still 

evaluating what work to move ashore and how to do so. The processes 

identified to date include identifying corrective maintenance, monitoring 

crew qualifications, fuel reporting, and remote monitoring of the condition 

of some ship systems. However, the Navy has not yet provided funding for 

 

34 Preventive maintenance refers to periodic tasks to keep equipment in good condition 

such as inspections, lubrication, or calibration. Facilities maintenance includes deep 

cleaning and preservation. 

Page 26 GAO-10-257 Littoral Combat Ship
 

the development, implementation, and long-term sustainment of these 

distance support capabilities. If these capabilities are not fully developed 

and maintained, then the crew’s workload could increase or the crew size 

might need to be increased. 

In addition, the Navy does not yet have a long-term maintenance strategy 

for the LCS seaframes and mission packages. Currently, the Navy has 

interim support plans for both the seaframes and mission packages that 

include contractor-provided maintenance. The Navy intends to develop 

and implement a long-term maintenance strategy by about 2015 for the 

mission packages and by the end of 2011 for the seaframes. The long-term 

strategy may continue to employ mostly contractor-provided maintenance 

or could consist of a combination of contractor- and service-provided 

maintenance in a Navy shipyard. According to Navy officials, the Navy has 

not yet analyzed core logistics capabilities for the LCS program but plans 

to do so as part of its analysis to identify a long-term maintenance strategy. 

Under section 2464 of Title 10 U.S. Code, DOD is required to maintain a 

“core logistics capability” that is government owned, government 

operated, and that uses government personnel, equipment, and facilities. 

However, we reported in May 2009 that DOD has neither identified nor 

established core capabilities in a timely manner for certain new systems 

that were included in the May 2009 report.35 Consequently, among other 

things, we recommended that DOD require an initial core assessment early 

in the acquisition process, preferably before Milestone B, and that 

acquisition strategies for new or modified systems include either a plan for 

establishing core capability within 4 years of initial operational capability, 

or a statement that no core capability requirements were identified. 

A Risk Assessment Could 

Inform Key Procurement 

Decisions 

Despite risks in implementing its new LCS operational concepts, the Navy 

has not specified the potential operational effects or identified alternative 

approaches if its concepts cannot be implemented as envisioned. The 2008 

National Defense Strategy describes the need to assess and mitigate risk 

in the execution of defense programs critical to national security, 

including risks relating to the department’s capacity to execute future 

 

35 GAO, Depot Maintenance: Actions Needed to Identify and Establish Core Capability at 

Military Depots, GAO-09-83 (Washington, D.C.: May 14, 2009). 

Page 27 GAO-10-257 Littoral Combat Ship
 

missions and manage personnel, training, and maintenance.36 Our prior 

work also showed that a risk assessment is a best practice that informs an 

organization’s decision making and includes identifying potential risks and 

identifying countermeasures to reduce the risks.37

The Navy acknowledges that there are risks in implementing its new LCS 

operational concepts for personnel, training, and maintenance, and has 

established some groups to manage the details of how to implement the 

concepts, such as the cross-functional teams and the Oversight Board. 

These groups identify and review issues and barriers to implementing the 

LCS concepts and work together to jointly develop solutions. In addition, 

the LCS program office has established a Risk Management Board, which 

monitors issues primarily related to development and production of the 

seaframe and mission packages and focuses on technical, schedule, and 

cost risks. In general, this board does not focus on personnel, training, and 

maintenance risks. Although the work these groups perform is important, 

their scope does not include a thorough risk assessment as described in 

DOD’s Strategy and GAO best practices. These groups are focused on how 

to make the operational concepts work and, as yet, have not fully 

identified operational risks and assessed alternatives to mitigate the risks 

if these new concepts for personnel, training, and maintenance cannot be 

implemented as intended. In the case of LCS, a thorough risk assessment 

could be used, for example, to: identify the operational limitations if a 40-

person core crew experiences undue fatigue and assess alternatives to the 

40-person core crew or to identify the operational limitations if the 

distance support does not work as intended and assess alternatives for 

supporting a small crew. Without such a risk assessment to inform 

decision makers, the Navy faces unspecified operational and program 

risks at the same time that it plans to buy a total of 23 ships by the end of 

fiscal year 2015. Although the LCS operational testing is expected to 

provide some insights into the effectiveness of the new operational 

concepts, according to Navy officials, the tests are not scheduled to be 

 

36 Department of Defense, National Defense Strategy (June 2008). The National Defense 

Strategy defined risk in terms of the potential for damage to national security combined 

with the probability of occurrence and the measurement of the consequences should the 

risk remain unaddressed. 

37 GAO, Homeland Defense: Actions Needed to Improve Management of Air Sovereignty 

Alert Operations to Protect U.S. Airspace, GAO-09-184 (Washington,D.C.: Jan. 27, 2009). 

GAO, Force Structure: Joint Seabasing Would Benefit from a Comprehensive 

Management Approach and Rigorous Experimentation Before Services Spend Billions on 

New Capabilities, GAO-07-211 (Washington, D.C.: Jan. 26, 2007). 

Page 28 GAO-10-257 Littoral Combat Ship
 

completed until about fiscal year 2014. As shown in figure 4 below, the 

Navy plans to make a significant investment in LCS force structure before 

it has information indicating whether the operational concepts are likely 

to be successful. 

Page 29 GAO-10-257 Littoral Combat Ship
 

Figure 4: Timeline Comparing the Navy’s LCS Procurement Plans with Key Events 

Affecting Implementation of the Operational Concepts 

Source: GAO analysis of Navy data.

Cumulative number 

of ships bought

 Events

• Navy decides ships’ crews should be 40 (May)

• Operational concept (first version - October)

• Operational concept (updated - March)

• Distance support requirements identified (April)

• Operational concept (updated September)

• Training study complete (December)

• Limited deployment of LCS 1a

• Decide long-term maintenance strategy

• LCS 1 “Fleet Ready” with Surface Warfare Package 

(December)b

• LCS 2 “Fleet Ready” (June)b

• Complete implementation of training study results

• Complete analysis of personnel requirements

• Operational test events scheduled through 

 September 2014

• Milestone Decision Point B (May-June)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Calendar

years

1

2

4

8

11

15

23

19

6

a

Although Navy officials expect to gather useful information about how to operate and support LCS 

during this limited deployment, the deployment will not fully reflect how the Navy intends to deploy 

LCS as described in the Wholeness Concept of Operations, according to Navy officials. For example, 

the ship will not be deployed for 18 months, may not rotate crews, and will have more than 78 people 

on board such as contractors to provide additional support and assistance. 

b

“Fleet Ready” means that a specific LCS and mission package combination has completed some 

testing and certification and is ready for a deployment tasking, according to a Navy official. 

Page 30 GAO-10-257 Littoral Combat Ship
 

If the operational concepts for personnel, training, and maintenance 

cannot be implemented as desired, then, according to Navy officials, the 

Navy may face operational limitations, may have to reengineer its 

operational concept, or may have to make significant design changes to 

the ship after committing to building 23 ships which represents a 

significant portion (42 percent) of the class. Further, without an 

assessment identifying the operational effects and without exploring 

alternatives, if the Navy’s approach to personnel, training, and maintaining 

LCS ships does not work as planned the Navy risks continuing to buy ships 

without the assurance that its plans for personnel, training, and 

maintenance can be implemented as envisioned. In contrast, having a 

thorough risk assessment of the new operational approaches to personnel, 

training, and maintenance would provide decision makers with 

information to link the effectiveness of these new operational concepts 

with decisions on program investment, specifically the pace of 

procurement. 

Given the Navy’s major investment in the LCS program, it is critical that 

DOD and congressional decision makers have a complete cost estimate 

that fully reflects best practices—including analyses of how costs may 

increase with time and vary with changing program assumptions, as well 

as comparison with an independently developed estimate. Such estimates 

are needed to enable decision makers to assess the program’s 

affordability, including the long-term, recurring operating and support 

costs, and assess the long-term operating and support costs of all the 

acquisition alternatives before a decision is made. Specifically, having 

complete estimates of the long-term operating and support costs that are 

periodically updated and based on results of complete and current force 

structure analyses could be an important factor for decision makers to 

consider when weighing program investment alternatives such as which 

seaframe to buy or options for what to do with the two seaframes of the 

design that is not selected. Although the Navy’s operating and support cost 

estimates showed some qualities of a sound estimating process, the Navy 

did not follow best practices, such as requesting an independent estimate 

and comparing it to the program estimate, analyzing the likelihood that 

costs will increase, and analyzing the effects on the estimate of key cost 

drivers. Further, the Navy’s force structure analyses of the quantities of 

required seaframes and mission packages are incomplete and based on 

assumptions, such as how many ships may be homeported overseas, 

which, if changed, could change the quantities required. Changes in the 

quantities of required seaframes and mission packages could affect 

estimates of the program’s total operating and support costs. Cost 

estimates that fully reflect best practices and are based on complete and 

Conclusions 

Page 31 GAO-10-257 Littoral Combat Ship
 

current force structure analyses of required quantities could enhance the 

ability of decision makers to identify the resources needed over the long 

term to support the seaframes and mission packages and assess the 

affordability of the LCS program. Further, decision makers in both DOD 

and Congress lack a complete picture of the likely long-term operating and 

support costs that will be incurred when buying an increasing number of 

LCS ships, hampering their ability to make sound program and investment 

decisions. 

At the beginning of the LCS program, the Navy stated that reducing the 

number of ship personnel would be a major factor in lowering operating 

and support costs. As a result, the Navy’s decision to operate the LCS with 

a core crew of only 40 sailors drove the need to develop new operational 

concepts. Currently, these concepts are broadly stated and the Navy has 

not fully developed the details to implement its vision for identifying 

personnel, providing LCS-unique training over the long term, or shifting 

maintenance from the ship to shore. Although the Navy acknowledges its 

approach entails risk, the Navy has not specified what the potential 

operational effects might be if its concept cannot be fully implemented as 

envisioned. For example, the Navy has not specified potential negative 

consequences to LCS missions or identified mitigating strategies if there 

are not enough or insufficiently trained personnel on board or if the 

distance support concepts cannot be fully implemented. The Navy’s LCS 

plans represent a significant investment to achieve its force structure goals 

at a time when there are competing demands for limited resources. 

However, without a thorough risk analysis including an assessment of 

alternatives, the Navy faces undefined and, potentially significant 

operational and program risks. If the operational concepts for personnel, 

training, and maintenance cannot be implemented as desired, the Navy 

may face operational limitations, may have to reengineer its operational 

concept, or may have to make significant design changes to the ship after 

committing to building almost half of the class. For example, a thorough 

risk assessment could help the Navy identify the operational risks of a 40-

person core crew, such as whether the crew can operate continuously for 

a 30-day mission without undue fatigue. A risk assessment could assess 

the alternatives such as the pros and cons of conducting shorter missions 

or increasing the size of the crew. Having such a risk assessment would 

enable decision makers to identify and assess: the operational effects if 

these concepts cannot be implemented as envisioned; alternatives to 

mitigate these risks; and information to link the effectiveness of these new 

operational concepts with decisions on program investment, specifically 

how many ships the Navy should buy each year. Moreover, doing so could 

Page 32 GAO-10-257 Littoral Combat Ship
 

help the Navy avoid costly retrofits if ship design changes are needed in 

order to implement its new concepts. 

We recommend that the Secretary of Defense take the following six 

actions: 

In order to assess the long-term affordability of the LCS program and 

enhance decision making ability for the LCS program, we recommend that 

the Secretary of Defense direct the Secretary of the Navy to take the 

following actions: 

Recommendations for 

Executive Action 

• before deciding which seaframe to buy, produce a complete estimate of 

the long-term operating and support costs which fully reflects cost 

estimating best practices for each seaframe and use these updated 

estimates in deciding which seaframe to buy for the remainder of the 

program; 

• use an updated estimate as a basis for analyzing the costs and benefits of 

options regarding the two seaframes built but not selected for long-term 

production, and use the results of this analysis in making the decision of 

how to use, or whether to retire, these seaframes; 

• annually update the cost estimate for the long-term operating and support 

costs of the seaframe and each mission package using cost estimating best 

practices and submit the results to DOD as well as to Congress as part of 

the LCS Selected Acquisition Report; 

• perform complete and updated force structure analyses on the LCS 

mission packages to help determine the appropriate purchase quantities 

over the life of the program, and use these updated quantities for the 

mission package cost estimate; and 

• perform an updated seaframe force structure analysis when key 

underlying assumptions affecting seaframe quantities change, such as 

crewing policy, overseas homeports, or presence requirements, and use 

this updated analysis to adjust quantities and to update the seaframe cost 

estimate. 

To improve the Navy’s ability to make better informed LCS program and 

investment decisions, we recommend that the Secretary of Defense direct 

the Secretary of the Navy to perform a risk assessment and consider the 

results before committing to buy LCS ships each year in order to link 

procurement with evidence that the Navy is progressing in its ability to 

implement its new personnel, training, and maintenance concepts and has 

taken actions to mitigate the operational effects if these concepts cannot 

Page 33 GAO-10-257 Littoral Combat Ship
 

be implemented as intended. Specifically, this analysis should identify and 

assess the: 

• operational limitations the Navy may face if the Navy’s approach to 

personnel, training, and maintenance cannot be implemented as 

envisioned; 

• possible alternatives, such as changes to the concepts or the ship design, 

and the related costs of those alternatives if the Navy’s approach to LCS 

personnel, training, and maintenance cannot be implemented as 

envisioned in its concept of operations; and 

• personnel policies and processes to reduce the risks to the LCS program. 

Such a holistic review could include the processes for identifying and 

assigning personnel, requirements LCS personnel must meet to qualify for 

assignment to an LCS crew, and identifying the total ship and shore LCS 

personnel required steady state to support the program over the long term. 

In written comments on a draft of this report, DOD agreed with four 

recommendations and partially agreed with two of our six recommended 

actions. The department’s comments are reprinted in their entirety in 

appendix II. DOD also provided technical comments, which we have 

incorporated as appropriate. 

Agency Comments 

and Our Evaluation 

DOD partially agreed with our first recommendation that the Navy 

produce an estimate of the long-term operating and support costs and use 

these estimates in deciding which seaframe to buy. DOD stated that the 

Navy will prepare two cost estimates, one for each seaframe design, that 

will include estimates of the total operating and support costs for the 

entire class of LCS ships. However, DOD stated that, since the Navy has 

not released the solicitation for the fiscal year 2010-2014 buy, it is 

premature to discuss the down-select criteria included in the solicitation. 

While we appreciate the sensitivity of discussing criteria for the downselect prior to the release of the solicitation, we noted in the report that 

operating and support costs are critical to any evaluation of acquisition 

alternatives since these costs constitute over 70 percent of system lifecycle costs. We continue to believe that decision makers should consider 

long-term operating and support costs when deciding which of the two 

seaframes to buy for the remainder of the program. DOD also stated that 

the LCS seaframe estimate we reviewed for the report was developed 

solely to support trade study analysis and was not intended as a budget 

quality estimate. We understand this was the case, but the seaframe 

estimate we analyzed was the only estimate available even though the 

Navy has bought four LCS ships. The intent of our recommendation is to 

Page 34 GAO-10-257 Littoral Combat Ship
 

encourage DOD to develop a comprehensive cost estimate to assist 

decision makers as the program moves forward. 

DOD agreed with our recommendation to use updated operating and 

support cost estimates to analyze the costs and benefits of options 

regarding the two seaframes built but not selected for long-term 

production. However, DOD stated that the Navy intends to operate and 

maintain the two non-selected LCS ships as part of the total LCS force 

structure but will continue to explore options to keep, sell, or retire the 

two non-selected ships during annual budget reviews. DOD’s response 

implies that, for the present, the department has decided to keep the two 

non-selected LCS ships without considering the results of a complete 

analysis of the costs and benefits of keeping the ships compared to other 

alternatives. As we point out in the report, it is important that estimates of 

long-term operating and support costs are available to decision makers to 

assess alternatives before a decision is made. However, if the 

department’s intent is to do such a cost analysis of alternatives and 

consider the results as part of the annual budget process, then their 

actions would meet the intent of our recommendation. DOD also agreed 

with our recommendations to include an annual update to the operating 

and support costs for the LCS program in the Selected Acquisition Report, 

and our recommendations to update both the seaframe and mission 

package force structure analyses and use these results in updating 

operating and support cost estimates. 

DOD partially agreed with our sixth recommended action that DOD 

perform a risk assessment and consider the results before committing to 

buy LCS ships each year in order to link procurement with evidence that 

the Navy is progressing in its ability to implement its new personnel, 

training, and maintenance concepts. DOD stated that it agrees such risk 

assessments are appropriate and should be conducted. However, DOD 

disagreed that the risk assessment results should be linked to annual 

procurement decisions since the acquisition strategy is now to buy LCS in 

blocks—that is multiple ships—in fiscal years 2010, 2012, and 2015. DOD 

stated that, as an alternative, it will consider reviewing the risk 

assessments for personnel policies, training, and maintenance planning at 

the start of each new block buy. At the time of our review, the acquisition 

strategy involving the block buys was not yet approved by DOD. We 

believe that DOD’s proposed alternative approach would meet the intent 

of our recommendation. However, we also believe that, given the new 

acquisition approach, it is even more important that DOD conduct the risk 

assessment and consider the results before making a procurement 

decision for each block buy since the department will be committing to 

Page 35 GAO-10-257 Littoral Combat Ship
 

several ships with each block and there will be a gap of several years 

between each block buy. As we point out in our report, without such a 

risk assessment to inform each procurement decision, the Navy risks 

buying ships without the assurance that its plans for personnel, training, 

and maintenance can be implemented as envisioned. 

We are sending copies of this report to the Secretary of Defense; the 

Secretary of the Navy; Naval Sea Systems Command; and Fleet Forces 

Command. In addition, the report will be available at no charge on the 

GAO Web site at http://www.gao.gov. 

If you or your staff have any questions, please call me at (404) 679-1816. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. Staff members who 

John H. Pendleton 

made key contributions to this report are listed in appendix III. 

Director 

Defense Capabilities and Management 

Page 36 GAO-10-257 Littoral Combat Ship
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To assess the extent to which the Navy estimated the long-term operating 

and support costs for the Littoral Combat Ship (LCS) seaframes and 

mission packages, we reviewed documentation of seaframes and mission 

package cost estimates prepared by the cost-estimating division of the 

Naval Sea Systems Command. We met with officials from Naval Sea 

System Command’s cost-estimating division, as well as the program offices 

responsible for developing both seaframes and mission packages, to 

discuss and document the methodologies employed in the estimates. We 

also met with the Office of the Secretary of Defense’s office of the Director 

of Cost Assessment and Program Evaluation (CAPE) to determine the 

extent to which CAPE had reviewed Navy cost estimates for LCS and 

produced an independent estimate. We compared the estimates to cost 

estimating best practices identified by the CAPE1

 and in the GAO Cost 

Estimating and Assessment Guide,

2

 and reviewed Department of Defense 

(DOD) and Navy acquisition regulations. To assess the extent to which the 

Navy analyzed the force structure requirements underlying the planned 

purchase quantities of LCS seaframes and mission packages, we met with 

officials of the Assessments and Surface Warfare divisions of the Office of 

the Chief of Naval Operations. We also reviewed documents reflecting the 

force structure analyses the Navy performed on LCS seaframes and 

mission packages. 

Although the Navy’s estimates did not fully reflect best practices, they 

were based on a cost-estimating process that we deemed sufficient for 

reporting, with appropriate limitations. To calculate an average annual 

seaframe operating and support cost estimate, we divided the Navy’s 

estimate of total operating and support costs of LCS seaframes by the 

planned purchase quantity of seaframes and by their expected service life. 

We multiplied the average annual estimated mission package operating 

and support cost for each mission package by the planned purchase 

quantity of that mission package and the assumed service life. We then 

added together the seaframe and mission package totals. To obtain an 

average annual seaframe cost that included the cost of mission packages, 

we divided this total program operating and support estimate by the 

 

1

 Office of the Secretary of Defense, Cost Analysis Improvement Group, Operating and 

Support Cost Estimating Guide (Arlington, Va., October 2007), Office of the Secretary of 

Defense, Cost Analysis Improvement Group, Operating and Support Cost Estimating 

Guide (Arlington, Va., May 1, 1992). 

2

 GAO, GAO Cost Estimating and Assessment Guide, GAO-09-3SP (Washington, D.C.: 

March 2009). 

Page 37 GAO-10-257 Littoral Combat Ship 
Appendix I: Scope and Methodology 

number of seaframe service years (seaframe quantity times assumed 

service life). We validated the methodology and results of our analysis 

with relevant officials from the Naval Sea Systems Command. However, 

our analysis of the Navy estimates is approximate and does not fully 

reflect cost estimating best practices as described in the report. 

To assess the extent to which the Navy has developed and implemented 

plans to operate and support LCS, particularly in the areas of personnel, 

training, and maintenance, we reviewed and analyzed DOD and Navy 

guidance, the LCS Wholeness Concept of Operations, and instructions on 

personnel, training, and maintenance as well as key studies and planning 

documents. We also reviewed prior GAO products and DOD guidance on 

risk management to assess the extent that Navy plans included 

assessments of program risk. In addition, we interviewed officials at 

Headquarters, Department of the Navy and Navy Sea Systems Command 

for personnel, training, and maintenance as well as Fleet Forces 

Command, Commander, Naval Surface Forces, Navy Personnel Command, 

Bureau of Naval Personnel, and Navy Manpower Analysis Center. 

To estimate long-term LCS personnel requirements, we analyzed Navy 

documentation, including personnel estimate documentation and the 

concept of operations, and validated the results with Navy officials at the 

offices listed above. To compare LCS training days to training days for 

other surface ships, we first identified a non-probability sample of LCS 

positions from both seaframes which were for critical positions such as 

the most senior enlisted personnel (E-8 or above), or those that generally 

met three of the following four criteria: 

• a position that required training in several areas outside the sailor’s 

primary specialty; 

• a position for a specialty that was on a list of 14 specialties which the 

Commander, Naval Surface Forces determined to have “unique cross rate 

training”; 

• a position for a specialty which, at the time, was filled at less than 100 

percent or a position for a specialty which, at the time, was filled at less 

than 100 percent at the lower levels, which might lead to less availability in 

the future; and 

• a position in the unplanned loss pool. 

To identify the training days required prior to reporting to an LCS crew, 

we obtained the training days required for the positions in our sample 

based on the Navy’s study of training requirements for LCS. We reviewed 

the process of how the Navy study team developed the course time 

Page 38 GAO-10-257 Littoral Combat Ship
Appendix I: Scope and Methodology 

requirements by speaking with knowledgeable officials and found the 

process was reasonable. To identify the training days required before 

reporting to a destroyer and amphibious transport docking ship, we 

obtained the training days required for comparable positions in our 

sample. We validated these data in meetings with Naval Sea Systems 

Command and Bureau of Naval Personnel officials. Finally, we compared 

the training days for LCS with the training days for the destroyer and 

amphibious transport docking ship. We reviewed the results of this 

comparison with Bureau of Naval Personnel, Fleet Forces Command, 

Naval Sea Systems Command, and several offices within the Office of the 

Chief of Naval Operations who generally agreed with the data, 

methodology, and results. Based on the work described above we 

concluded that the data were sufficiently reliable for our purposes. 

We conducted this performance audit from October 2008 through 

February 2010 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Page 39 GAO-10-257 Littoral Combat Ship
Appendix II: Comments from the Department Appendix II: Comments from the Department of Defense 

of Defense 

Page 40 GAO-10-257 Littoral Combat Ship 
Appendix II: Comments from the Department 

of Defense 

Page 41 GAO-10-257 Littoral Combat Ship
Appendix II: Comments from the Department 

of Defense 

Page 42 GAO-10-257 Littoral Combat Ship
Appendix II: Comments from the Department 

of Defense 

Page 43 GAO-10-257 Littoral Combat Ship
Appendix II: Comments from the Department 

of Defense 

Page 44 GAO-10-257 Littoral Combat Ship
Appendix III: GAO

A

 Contact and Staff 

cknowledgments 

Page 45 GAO-10-257 

Appendix III: GAO Contact and Staff 

Acknowledgments 

John H. Pendleton, (404) 679-1816, pendletonj@gao.gov

In addition to the contact named above, Patricia W. Lentini, Assistant 

Director; Brenda M. Waterfield; James R. Bancroft; Simon J. Hirschfeld; 

Linda S. Keefer; and Grace Coleman made key contributions to this report. 

 Littoral Combat Ship 

GAO Contact 

Acknowledgments 

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