NAVY SHIPBUILDING

Significant Investments in 

the Littoral Combat Ship 

Continue Amid Substantial 

Unknowns about 

Capabilities, Use, and Cost

Statement of Paul L. Francis, Managing Director 

Acquisition and Sourcing Management

Testimony 

Before the Subcommittee on Seapower 

and Projection Forces, Committee on 

Armed Services, House of 

Representatives

For Release on Delivery 

Expected at 9:30 a.m. EDT

Thursday, July 25, 2013

GAO-13-738T

United States Government Accountability Office
 

Page 1 GAO-13-738T 

Chairman Forbes, Ranking Member McIntyre, and Members of the

Subcommittee:

I am pleased to be here today as you examine issues related to the 

Department of the Navy’s Littoral Combat Ship (LCS)—a program framed 

by a revolutionary approach to shipbuilding acquisition and naval 

operations. The LCS consists of the ship—called a seaframe—and 

mission modules, which, when integrated with the seaframe and 

supplemented with aviation support, provide mission capability.1 Unlike 

other Navy surface combatants, which generally have fixed mission 

systems, LCS is intended to be reconfigurable to perform three primary 

missions: surface warfare (SUW), mine countermeasures (MCM), and 

anti-submarine warfare (ASW). These modules are intended to give the 

Navy flexibility to change equipment in the field to meet different mission 

needs and incorporate new technology to address emerging threats. 

Further, LCS is envisioned to have a smaller crew by relying instead on 

shore-based support for its administrative and maintenance needs. The 

total estimated acquisition cost of the LCS program is over $40 billion in 

2010 dollars. In total, the Navy plans to buy 52 seaframes and 64 mission 

packages. GAO has previously reported on a number of challenges 

related to the LCS program, including cost growth, schedule delays, and 

problems with delivering intended capabilities.2 My remarks today are 

based on our most recent report, which is being released at this hearing, 

titled Navy Shipbuilding: Significant Investments in the Littoral Combat 

Ship Continue Amid Substantial Unknowns about Capabilities, Use, and 

Cost.3

The Navy’s acquisition strategy for LCS seaframes has changed several 

times over the past decade. The original plan was to fund one or two 

initial ships, and then spend time experimenting with the seaframes and 

overall LCS concept before ultimately selecting one seaframe design. The 

Navy changed this strategy in 2010, however, and has continued to buy 

 

1

When one or more mission modules are integrated with aviation capability it is referred to 

as a mission package.

2

GAO, Navy’s Ability to Overcome Challenges Facing the Littoral Combat Ship Will 

Determine Eventual Capabilities, GAO-10-523 (Washington, D.C.: Aug. 31, 2010).

3

GAO, Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue 

Amid Substantial Unknowns about Capabilities, Use, and Cost, GAO-13-530 (Washington, 

D.C.: July 25, 2013).

 
 

Page 2 GAO-13-738T 

seaframes from two different shipbuilding teams—each with different 

design variations. One is led by Lockheed Martin—which builds its ships 

at Marinette Marine in Marinette, Wisconsin—and the other is led by 

Austal USA in Mobile, Alabama.4 The two designs reflect different 

contractor solutions to the same set of performance requirements. The 

most notable difference is that the Lockheed Martin Freedom variant 

(LCS 1 and other odd-numbered seaframes) is a monohull design with a 

steel hull and aluminum superstructure, while the Austal USA 

Independence variant (LCS 2 and other even-numbered seaframes) is an 

aluminum trimaran.5

The Navy has accepted delivery of the first three seaframes and has 

spent several years completing various test and maintenance events on

the first two—USS Freedom (LCS 1) and USS Independence (LCS 2).

USS Fort Worth (LCS 3) was delivered in June 2012. During this time, we 

and others reported on a number of problems with the seaframes and 

their equipment, as well as challenges related to the development of 

mission module technologies. In light of these issues, we were asked to 

conduct a broad evaluation of the LCS program. Our report addresses (1) 

the Navy’s progress in producing and testing LCS seaframes and any 

remaining risks; (2) the Navy’s progress in developing, producing, and 

testing LCS mission modules and any remaining risks; and (3) any risks 

in the Navy’s acquisition strategy for the integrated LCS program. To 

address these issues, we evaluated acquisition and requirements 

documents, testing plans, and delivery schedules for the two seaframe 

variants and the various mission modules. We also interviewed 

Department of Defense (DOD) and Navy officials, visited both shipyards, 

and toured the three LCS ships that have been delivered to the Navy to 

date. This work was conducted in accordance with generally accepted 

The Navy is developing the mission packages in 

increments in order to field capabilities faster. The Navy plans on 

ultimately fielding one ASW increment and four MCM and SUW 

increments.

 

4

For LCS 2 and LCS 4, General Dynamics was the prime contractor for the Austal USAbuilt ships. General Dynamics and Austal USA ended their teaming arrangement in 2010. 

Austal USA is the prime contractor for the 10 other even-numbered seaframes currently 

under contract.

5

A trimaran is a ship that has three separate hulls. The Navy is now referring to the 

Independence-class variant as a slender stabilized monohull design.
 

Page 3 GAO-13-738T 

government auditing standards.6

We found that the Navy has made progress in addressing some of the 

early design and construction problems on the LCS 1 and LCS 2 

seaframes, and quality defects and unit costs are declining, now that the 

seaframes are in steady production. Based on projected learning curves, 

shipyard performance can be expected to continue to improve over time. 

This expected progress could, however, be disrupted, as the Navy is 

considering potentially significant seaframe design changes. For 

example, the Navy is currently studying changes to increase the 

commonality of systems and equipment between the two ship variants, 

primarily with regard to the ships’ combat management systems, and add 

new capabilities. In addition, the Navy still has outstanding gaps in its 

knowledge about how the unique designs of the two variants will perform 

in certain conditions. The lead ship of the Freedom class is currently on 

an extended deployment to Southeast Asia, and the Navy views this as 

an important opportunity to demonstrate some of the ship’s capabilities 

and allow the crew to obtain first-hand experience with operations. Yet, 

developmental testing of the seaframes is ongoing, and neither variant 

has completed shock and survivability testing, which will demonstrate that 

the ship designs can safely absorb and control damage. Importantly, 

operational testing of the LCS with its mission modules is several years 

away, which I will discuss later. Late discoveries of problems while the 

seaframes continue to be constructed could lead to further design 

changes.

The key points from our report are 

summarized below.

The Navy continues to buy early increments of LCS mission packages

before (1) defining requirements and cost, schedule, and performance 

goals for each increment, as currently required by DOD policy and (2) 

completing developmental testing, which to date has identified problems 

with system performance. This evolutionary acquisition strategy, which 

delivers improving levels of capability over several increments, offers 

warfighters improved capability as it is available. However, the 

requirements for the increments have not yet been defined, and the 

increments will provide performance below the Navy’s minimum needs for 

years to come. In addition, the Navy does not plan to demonstrate that 

 

6

For detailed information about our scope and methodology, please see GAO-13-530. 

Seaframe Progress

Mission Module 

Progress 
 

Page 4 GAO-13-738T 

the MCM and SUW packages can meet minimum—termed “threshold”—

requirements until their final increments are fielded in 2017 and 2019, 

respectively.7 By that time, the Navy will have already procured more than 

24 MCM and SUW mission packages. Further, developmental testing to 

date—especially for the systems comprising the MCM package—has 

shown performance problems. Internal Navy studies and wargames have 

also raised concerns with the overall effectiveness of each mission 

package based on inherent seaframe or mission module limitations.

Significant questions remain about the LCS program and its underlying 

business case, even as seaframe and mission package procurements 

continue. Elements of the LCS business case—including its cost and its 

anticipated capabilities—have degraded over time. Given the program’s 

cost growth and schedule delays, the congressional cost cap has 

increased from $220 million in fiscal year 2006, to $480 million in fiscal 

year 2010 per ship.

8

 

7

The Navy plans to meet the threshold performance levels for the ASW package in 2016. 

This is the first and only increment of that module.

Expected capabilities have lessened from optimistic, 

early assumptions to more tempered and reserved assumptions. While 

more explicit examples of specific capabilities that changed are classified, 

table 1 depicts some significant examples of the changes in Navy 

statements about LCS’s capability from early in the program to today.

8

The $220 million cap applied to the fifth and sixth ships of the class. Pub. L. No. 109-

163, § 124. The $480 million cap applies beginning in fiscal year 2011. Pub. L. No. 111-

84, § 121 (2009). GAO-10-523. 

Acquisition Strategy 

and Business Case 

Risks 
 

Page 5 GAO-13-738T 

Table 1: Evolution of Navy Statements about Littoral Combat Ship (LCS) Capability

Concept Early (2004-2008) Current (2011-2012)

LCS’s capability against 

adversaries

Primarily developed for use in major combat 

operations.

Will gain initial entry and provide assured 

access—or ability to enter contested spaces—

and be employable and sustainable throughout 

the battlespace regardless of anti-access or areadenial environments.

Current LCS weapon systems are underperforming and offer little chance of survival in a 

combat scenario.

Not to be employed outside a benign, low-threat 

environment unless escorted by a multi-mission 

combatant providing credible anti-air, antisurface, and anti-submarine protection.

How LCS will deploy Will be a self-sufficient combatant designed to 

fight and win in shallow water and near-land 

environments without risking larger combatants in 

constricted areas.

Lacks the ability to operate independently in 

combat. Will have to be well protected by multimission combatants. Multiple LCSs will likely 

have to operate in a coordinated strike attack 

group fashion for mutual support.

How mission package swaps 

will be utilized

Mission packages will be quickly swapped out in 

an expeditionary theater in a matter of days.

Mission packages can be swapped within 72 

hours if all the equipment and personnel are in 

theater, which may take significantly longer. An 

LCS executing a package swap could be 

unavailable for between 12-29 days. 

Source: GAO analysis of Navy documents. 

Note: Documents reviewed include LCS capability development documents, LCS concept of 

operations, and LCS wargaming reports.

Significant unknowns related to key LCS operations and support concepts 

may also affect the cost of the program and soundness of the business 

case. Several of the key concepts that underpin the program—such as 

employing modular weapon systems, highly reduced manning levels, and 

heavy reliance on shore-based contractor maintenance—represent 

innovative approaches that have not yet been validated through 

operations. Changes to any of the above concepts could affect the LCS 

program and employment of the ships. For example, the Navy may learn 

that one seaframe variant is more useful in certain mission sets or 

operating areas than the other.

Finally, the Navy continues to pursue an acquisition strategy that commits 

to the purchase of significant numbers of ships and mission packages

before sufficient knowledge is available, especially testing, as illustrated 

in figure 1.
 

Page 6 GAO-13-738T 

Figure 1: Alignment of Planned Littoral Combat Ship Seaframe Contract and Test 

Activities

For example, operational testing will demonstrate whether the mission 

packages, integrated with the seaframes, can meet the Navy’s 

performance requirements. However, as shown in figure 1, based on the 

current strategy, by the time key operational tests are completed—

planned to occur in fiscal year 2019—the Navy will have purchased 33 

seaframes—more than half of the planned number. The Navy already has 

24 of the planned 52 seaframes under contract, and plans to award 

further contracts in 2016, before DOD makes a formal decision about full 

rate production of the ships in 2019. The congressional timeframe for 

making decisions regarding the Navy’s next planned buy is even shorter: 

the authority and funding the Navy needs to proceed with the 2016 

contracts will be presented to Congress in the spring of 2015.

In conclusion, the current LCS program is not the program envisioned 

over a decade ago. Initial cost estimates have been significantly 

exceeded and the supporting business case continues to evolve. I believe

the LCS class is a novel concept with features that could influence the 

designs of future Navy ships and all parties would like to see the ships 

succeed with those features. On that score, the Navy has a great deal of 

learning to do about the ships, the integrated capability that they are 

intended to provide when equipped with the mission packages, and how

the overall LCS concept will be implemented. Today, the Navy continues 

to learn about the seaframe design, cost, and performance. But, it still 

does not know how well the ships will perform their missions, how well its 

unique crewing and maintenance concepts will work, or how much it will 

cost to equip and support the ship. Further, the Navy is still considering 

changes to the ships’ design and determining whether or not there are 

even advantages to having two ship designs. These are things the Navy 
 

Page 7 GAO-13-738T 

and Congress should know before contracting for more than half of the 

ships. The deficiencies we have identified are not criticisms of progress in 

the sense that things should have gone more smoothly or quickly—some 

issues are expected as part of the discovery process with a new class of 

ships. At issue, rather, is the misalignment of the program’s progress with 

acquisition decisions, and with key decisions being made well before 

requisite knowledge is available. This is especially true for LCS, which is 

well into production at the same time it is still an experimental concept.

In our report, we make several recommendations to DOD. For example, 

we recommended that DOD limit future seaframe acquisitions until it 

completes a full-rate production review, and that the Navy limit mission 

module purchases to the minimum quantities required to support 

operational testing. We also recommended that DOD report to Congress 

on the relative advantages of each seaframe variant for each key LCS 

mission prior to awarding any additional seaframe contracts. In its written 

response, DOD did not agree with our recommendations aimed at 

slowing the pace of seaframe and mission package procurements. The 

Navy cited the need to buy ships at the planned pace to keep pricing low 

and saw no value in reducing production until the full-rate production 

decision. We continue to believe that the acquisition approach for this 

program, with large quantities of ships and modules being bought ahead 

of key test events, is risky, especially for a new class of ship, like LCS.

DOD agreed that the Navy could, if requested by Congress, report on the 

performance of each seaframe variant against current LCS requirements. 

However, this response did not address the intent of our 

recommendation, which was to provide an assessment of the relative 

costs and advantages and disadvantages of the variants against 

operational and mission needs in order to help inform future procurement 

decisions. A complete discussion of DOD’s comments and our evaluation

are provided in the report.

Our report also includes two matters for congressional consideration. 

First, to ensure that continued LCS investments are informed by 

adequate knowledge, Congress should consider restricting funding for 

additional seaframes until the Navy completes ongoing technical and 

design studies related to potential changes in LCS requirements, 

capabilities, and the commonality of systems on the two seaframe 

variants. Second, to ensure timely and complete information on the 

capabilities of each seaframe variant prior to making decisions about 

future LCS procurements, Congress should consider requiring DOD to 

report on the relative advantages of each variant in carrying out the three 

primary LCS missions. 
 

Page 8 GAO-13-738T 

Chairman Forbes, Ranking Member McIntyre, and Members of the 

Subcommittee this completes my prepared statement. I would be pleased

to respond to any questions that you or other members of the 

subcommittee may have at this time. 

For questions about this statement, please contact Paul Francis at (202) 

512-4841, or at francisp@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Individuals making key contributions to this testimony 

include: Michele Mackin (Director), Ron Schwenn (Assistant Director); 

Diana Moldafsky (Assistant Director); Kristine Hassinger, Amber Keyser, 

and C. James Madar.

Contact and Staff 

Acknowledgments 

(121164)
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