Littoral Combat Ship: Need to Address Fundamental Weaknesses in LCS and Frigate Acquisition Strategies
Published: 2016-06-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In February 2014, the Secretary of Defense cited concerns with the combat capabilities of the LCS—a small surface combatant (SSC) consisting of a ship and reconfigurable mission packages built by two shipyards as different variants, with 26 LCS delivered or under contract. The Secretary directed an assessment of alternatives for a SSC. A Navy task force analyzed new and existing designs, including modified LCS concepts.
The House report for the National Defense Authorization Act for Fiscal Year 2015 included a provision for GAO to analyze the Navy's study and the implications for future procurement. This report examines: (1) how the Navy arrived at its preferred solution, and (2) the potential risks associated with the Navy's approach to acquiring the SSC and continued procurement of LCS, among other objectives. To conduct this work, GAO analyzed the task force study and other documentation, and interviewed task force, Navy, and Office of the Secretary of Defense officials.
section_title: What GAO Found
paragraphs: The Navy's task force studied a number of options to improve upon known shortfalls in Littoral Combat Ship (LCS) lethality and survivability. It found that neither LCS variant with minor modifications met the Navy's desired capabilities without further tradeoffs. After briefing senior Navy leadership, the task force was directed to further examine the LCS options, which required it to alter or in some cases reduce some capabilities. In late 2014, the Navy recommended (and the Secretary of Defense approved) procuring both variants of a minor modified LCS, designating it a “frigate.” The Navy prioritized this option because of its relatively lower cost and quicker ability to field, as well as the ability to upgrade remaining LCS, over making more significant capability improvements. GAO's analysis found the planned frigate will not provide much greater capability in some areas than LCS and that some cost assumptions may have overstated this option's affordability.
As the Navy pivots from LCS to the frigate program, which is estimated to cost more than $8 billion for ship construction alone, its approach would require Congress to appropriate funding with key unknowns. The table outlines GAO's observations on the Navy's acquisition strategy.
Of note, the industrial base considerations that have factored into prior LCS decisions are less compelling, as both yards will be building LCS currently under contract through fiscal year 2021. Finally, there are no current plans for official DOD milestone reviews of the frigate program, which is a major acquisition program based on its anticipated costs. In addition, the Navy does not plan to develop key frigate program documents or to reflect frigate cost, schedule, and performance information in the annual Selected Acquisition Reports (SAR) submitted to Congress. Without adequate oversight, federal funds may not be effectively spent.
section_title: What GAO Recommends
paragraphs: Congress should consider not funding any requested LCS in fiscal year 2017 and should consider requiring the Navy to revise its acquisition strategy for the frigate. GAO also recommends that the Department of Defense (DOD) align reviews to precede key acquisition decisions and enhance oversight by requiring the frigate program to develop key program documents and to report on the frigate separately in the SAR. The department concurred with the first recommendation and partially concurred with the second.

section_title: Letter
paragraphs: The Navy’s vision for the Littoral Combat Ship (LCS) has evolved since its  inception. As we have previously reported, LCS was initially envisioned  as a self-sufficient combatant designed to fight and win in shallow water  and near-land environments, but this concept has weakened over time  based on the realization that the ship would be less capable of operating  independently in higher threat environments than expected and would  play a more limited role in major combat operations. Recently, several  Department of Defense (DOD) directions have further changed plans for  the ship.
In February 2014, approximately 9 years after the first LCS started in  production and with 9 ships under construction at each of two shipyards,  then-Secretary of Defense Chuck Hagel announced that he had  considerable reservations about the level of capability and lethality of LCS  and directed the Navy to contract for no more than 32 ships instead of 52  ships as originally planned. The Secretary directed the Navy to study  alternatives to the LCS that would provide capabilities “consistent with a  frigate.” In response, the Navy established the Small Surface Combatant  Task Force, which we refer to in this report as the task force, to evaluate  different design solutions including completely new and existing ship  designs and LCS options with both major and minor modifications.
In November 2014, the Navy recommended buying a small surface  combatant (SSC) based on an LCS design with minor modifications. The  Navy refers to this ship as a frigate. Secretary Hagel approved the Navy’s  plan and, in December 2014, authorized the Navy to buy a mix of 52 LCS  and frigates with the mix determined by the Navy. Combined, LCS and  the frigate will represent approximately one-sixth of the Navy’s entire 300- ship fleet. The Navy moved forward with plans to acquire 20 frigates and  intended to begin frigate production in 2019 after the first 32 LCS were  completed. However, in December 2015, Secretary of Defense Ashton  Carter provided new direction to the Navy. Citing concerns with the  Navy’s balance between capability and quantity of platforms, he directed  a number of actions, including that the Navy would buy only 40 LCS and  frigates—a reduction of 12 ships.
Since 2005, we have raised many concerns about the Navy’s acquisition  of LCS, including its combat effectiveness and decreased expectations of  its capability. In July 2013, we highlighted the program’s risk of cost  growth, schedule delays, and technical problems related to delivering  intended capabilities. Most recently, in December 2015, we concluded  that the lethality and survivability of LCS is still largely unproven, and that  important questions remain about how LCS will operate and what  capabilities it will provide the Navy. The House Armed Services  committee report for the National Defense Authorization Act for Fiscal  Year 2015 included a provision that we examine a number of elements  related to the task force’s work—including whether the study equated to a  formal analysis of alternatives—and the Navy’s future SSC plans. This  report examines: (1) the task force’s process for doing its study and the  findings presented to Navy leadership; (2) how the Navy arrived at its  preferred solution of a modified LCS for its future SSC and the extent to  which this solution will address survivability and lethality concerns, and  (3) the potential risks associated with the Navy’s approach to acquiring  the SSC and continued procurement of LCS.
To conduct our work, we analyzed the task force’s February 2015 final  report and associated classified and unclassified appendices and working  papers. We conducted interviews with task force members, including  several interviews with the study director. We also consulted with Navy  and Office of the Secretary of Defense (OSD) subject matter experts on  the study’s inputs and conclusions, as well as Office of Cost Analysis and  Program Evaluation (CAPE) and Office of the Director, Operational Test  and Evaluation (DOT&E) officials who had been asked to assess the task  force study and the Navy’s decision. To assess any potential risks  associated with continued procurement of LCS, we analyzed LCS  contracts and contract modifications, as well as production data related to  cost and schedule performance for LCS currently in production. We also  interviewed officials from the LCS program office and shipyard  representatives from Lockheed Martin and Austal USA, where the LCS  variants are being constructed. To assess any potential risks associated  with the procurement of the future frigate, we analyzed frigate  requirements documentation and available design-related documentation,  as well as the preliminary acquisition documentation, and we interviewed  officials from the frigate program office. For more information on our  scope and methodology, see appendix I.
We conducted this performance audit from April 2015 through June 2016  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, and that the data we obtained  and analyzed are sufficiently reliable for the purposes of our assessment.
subsections: section_title: Background
paragraphs: LCS is intended to be a reconfigurable ship that can perform one of three  different primary missions at one time: mine countermeasures (MCM),  surface warfare (SUW), and anti-submarine warfare (ASW). This ability to  conduct only one primary mission at a given time is called a single- mission capability. The LCS consists of two distinct parts—the ship itself  (called a seaframe) and the interchangeable package of sensors,  weapons, and aircraft that it carries and deploys (called a mission  package), which enables one of the three primary missions. The mission  packages provide the majority of the ship’s combat capability. The Navy  envisioned LCS as a “truck” that could swap payloads to reconfigure its  capabilities based on mission needs. LCS also has a minimal crew size  compared to other ships, with much of its maintenance and support  performed on shore instead of onboard by the crew.
Two shipyards are currently building an equal number of two different  versions of the LCS seaframe: Lockheed Martin—which builds its ships at  Fincantieri Marinette Marine in Marinette, Wisconsin—and Austal USA,  which builds its ships in Mobile, Alabama. This report refers to the  Lockheed Martin ships as the Freedom variant and the Austal USA ships  as the Independence variant. The two designs reflect different contractor  solutions to meeting the same set of performance requirements. The  most notable difference is that the Freedom variant (LCS 1 and other  odd-numbered seaframes) is a monohull design with a steel hull and  aluminum superstructure, while the Independence variant (LCS 2 and  other even-numbered seaframes) is an aluminum trimaran. The Navy  had planned to award contracts for 6 additional LCS seaframes in 2017  and 2018 and transition to the frigate on the 33rd seaframe; however,  recent direction from the Secretary of Defense to reduce the total number  of seaframes from 52 to 40 has changed this plan. Table 1 shows the  status of LCS seaframe acquisition as of February 2016.
subsections: section_title: Our Prior Work
paragraphs: Since 2005, we have reported on a number of issues with the LCS  program. In addition to highlighting concerns about the ship’s combat  capabilities, we have also reported on significant changes to the Navy’s  acquisition strategy for buying LCS. For example, as we reported in 2010,  the Navy announced that, following unsuccessful contract negotiations for  fiscal year 2010 funded seaframes, it would switch from its plan to  continue buying both ship designs and move to a downselect approach,  where one shipyard would be awarded contracts for future LCS.  Following approval of this strategy in January 2010, the Navy issued a  new solicitation—intended to lead to a downselect—for fiscal year 2010  seaframes. However, in November 2010, following receipt of new industry  proposals, the Navy proposed changing its acquisition strategy back to  awarding new construction contracts to both industry teams. Congress  approved this approach in December 2010.
In July 2013, we highlighted a number of risks related to the LCS  program, including cost growth, schedule delays, and technical problems  related to delivering intended capabilities. We found that the LCS  concept has changed significantly over time due, in large part, to  problems associated with technology development and integration, and  we questioned the soundness of the Navy’s business case for continuing  to buy LCS seaframes and mission packages given the unknowns related  to its ability to address key warfighting and support concepts. Due to  these unknowns, we asked Congress to consider restricting future  funding for construction of LCS seaframes until the Navy conducted  certain technical studies and reported on the relative strengths and  weaknesses of both seaframe variants. We also recommended that the  Navy only buy the minimum quantity and rate of LCS required to maintain  the production base and mission modules to support operational testing.  DOD did not agree with our recommendation to slow the procurement of  either LCS seaframes or mission packages, citing in part industrial base  considerations. Congress did not restrict funding, but directed the  seaframe variant assessment. As we reported in December 2015,  however, the resulting report was not adequately detailed. The Navy  essentially suggested that since the two variants are built to the same  requirements they perform the same way. The Navy did not present a  more detailed comparison that would address our recommendation.
In July 2014, we found that key LCS concepts remained untested and  concurrency risks—continuing to buy ships while key concepts and  performance are still being tested—remained. We also found that the  Navy and its shipyards were having difficulty managing the weight of the  seaframes, which can create potential complications for making additional  changes to each seaframe design, and that weight growth during  construction had negatively affected performance of the initial LCS  seaframes. We have also reported that the Independence variant was  behind the Freedom variant in terms of overseas deployment experience,  with an Independence variant yet to deploy. In that report, we  recommended that before approving the release of the request for  proposals (RFP) for future contracts for either seaframe variant, the Office  of the Under Secretary of Defense for Acquisition, Technology, and  Logistics (USD(AT&L)) require that both variants have deployed overseas  and completed certain testing, including testing of the ships’ lethality and  survivability. We also recommended the Navy take steps to improve its  ability to effectively oversee weight management of the LCS seaframes.  DOD partially agreed with our recommendations to complete deployment  activities and testing before approving the release of the request for  proposals for future seaframes and agreed with our recommendations  related to seaframe weight management. To date, certain LCS test  events remain incomplete or the Navy has not yet provided test results to  Congress and GAO.
In December 2015, we issued an unclassified version of a classified July  2015 report that identified concerns with elements of LCS lethality and  survivability. Survivability is the ability of a ship to avoid, withstand, or  recover from damage. It consists of three elements: susceptibility,  vulnerability, and recoverability. We found that the lethality and  survivability of both LCS variants is still largely unproven. We also found  that the Navy lacks a full understanding of LCS vulnerability, particularly  with respect to the Independence variant’s aluminum hull. In this report,  we asked Congress to consider restricting funding for LCS construction in  2016 and beyond until the Navy submitted an acquisition strategy for the  frigate that was approved by the Secretary of Defense; a plan to upgrade  the existing LCS and an analysis of the cost and engineering feasibility  and risks of doing so; and report on the results of a rough water trial  report for both variants. We also recommended that the Secretary of  Defense direct the Navy to investigate more operationally stressing  mission package testing and solicit an independent technical assessment  on Independence variant survivability. DOD largely agreed with our  recommendations. Congress funded three LCS in fiscal year 2016 as  requested by the Navy but limited obligation of the funds until the Navy  submitted an acquisition strategy, a plan to upgrade LCS, and a current  LCS test and evaluation master plan. The Navy provided this  documentation.
section_title: Navy Small Surface Combatant Study
paragraphs: In March 2014, following the then-Secretary of Defense’s February  announcement requiring the Navy to conduct a study of its SSC needs,  the Chief of Naval Operations (CNO) and Assistant Secretary of the Navy  for Research, Development, and Acquisitions created the task force to  lead the study. This task force was organized under a study leader, and  the CNO initially assigned seven Navy officers and one Navy civilian also  set up a flag officer/senior executive service advisory group that provided  input and advice, as required. The study leader subsequently  broadened the task force membership, drawing on a number of Navy  experts that were assigned to sub-groups that focused on issues like ship  designs, combat systems, cost estimation, and other related areas to  identify feasible design approaches. The task force final report, issued in  February 2015, stated that the team included over 40 engineers and  scientists, requirements analysts, and cost analysts from across naval  systems commands and warfare center communities.
The task force was directed to consider new and existing ship design  options, to include modified LCS design options. The task force created  two categories of LCS modifications: one, labeled “minor modified LCS,”  that kept the same basic hull, mechanical, and electrical characteristics  as the two LCS variants, and another labeled “major modified LCS” that  lengthened the hulls to provide for adding new capabilities. New designs  reflected designs of ships conceived of and configured by the task force,  while existing designs included various non-LCS options offered by both  U.S. and international shipbuilders. Senior Navy leadership also directed  the task force to conduct a comparison of the capabilities of the most  recent U.S. Navy frigate—the now-retired Oliver Hazzard Perry class  (FFG 7)—with those of LCS. The task force also developed what it called  “capability concepts,” which reflected a range of potential capability  options for an SSC and on which it modeled various designs. The  Secretary of Defense announced in December 2014 that the department  would pursue a minor modified LCS as the SSC (termed a frigate), and  the task force produced its written report in February 2015.
section_title: Secretary of Defense Directed Program Truncation
paragraphs: In December 2015, the Secretary of Defense issued a memorandum to  the Secretary of the Navy in which he stated that the Navy would build no  more than 40 LCS and frigates, down from the prior planned 52, and  directed the Navy to buy 8 fewer of these ships over the next 5 years than  planned. Specifically, the Secretary of Defense directed the Navy to buy a  single LCS or frigate in fiscal years 2017 through fiscal year 2020 and two  ships in fiscal year 2021. According to the Secretary of Defense’s  memorandum, this new direction was in part a response to his concern  that the Navy was prioritizing ship numbers over lethality. Further, the  Secretary stated that the Navy would be required to downselect to one  variant of LCS and frigate by fiscal year 2019, rather than continuing to  buy two different variants. Although the procurement profile outlined in  the Secretary of Defense’s direction called for one ship in fiscal year  2017, the President’s fiscal year 2017 budget requested two LCS.
section_title: After Extensive Analyses, Task Force Found Minor Modified LCS Was Least Capable Option for Meeting Desired Small Surface Combatant Capabilities
paragraphs: We found that the task force conducted an extensive analysis of existing,  modified, and new design options for the Navy’s new planned SSC,  especially given its limited timeframe. The task force was not directed to  conduct an analysis of alternatives (AOA) that is typically used to  determine a materiel solution to a capability gap. Senior Navy leadership  told us that they believe the process the task force used was more in- depth than an AOA; for example, one component of the task force  process was to gather input directly from fleet operators. The task force  initially found that a minor modified LCS was the least technically feasible  and capable option for meeting the Navy’s desired SSC capabilities. After  the task force briefed senior Navy leadership in July 2014, the task force  was asked to examine what capabilities a minor modified LCS could fulfill.  With consideration for the range of desired enhanced performance and  capabilities for the SSC as identified by the fleet representatives, the task  force subsequently identified additional minor modified LCS options,  though these options would also require accepting reduced weight and  other design margins to accommodate the changes. These alternate LCS  options offered reduced capabilities as compared to some capability  concepts the task force had initially identified, as capabilities had to be  downgraded to accommodate the design constraints of the minor  modified LCS.
subsections: section_title: Task Force Conducted an Extensive Analysis Given Time Constraints
paragraphs: The task force conducted an extensive analysis of design and capability  alternatives and analyses of total life-cycle costs for potential SSC  options, especially given the compressed time frame given by Navy  leadership. In his February 2014 tasking memo, Secretary Hagel directed  the Navy to report back to him in approximately one year so that the  results could inform the fiscal year 2016 budget process. The CNO  subsequently told the task force to deliver its findings to his office in July  2014, approximately 4 months after the task force was formed. The final  task force report was published in February 2015, after a series of senior  level briefings and the Secretary of Defense’s December 2014 decision to  pursue a minor modified LCS as the SSC, which the Navy has termed a  frigate. The Navy established a frigate program office in January 2015,  under the current LCS Program Executive Office. Figure 1 illustrates the  compressed time frames of these events.
section_title: Study Was Not an Analysis of Alternatives Though Purpose Was Similar
paragraphs: While the task force did not conduct an AOA, it was directed to  investigate potential materiel solutions to satisfy a capability gap.  According to the DOD’s Defense Acquisition Guide, an AOA is an  analytical comparison of the operational effectiveness, suitability, and life- cycle cost (or total ownership cost, if applicable) of alternatives that  satisfy established capability needs. Secretary Hagel did not specify the  type of analysis he expected, and the time allotted to the complete the  study was significantly shorter than typical AOA time frames, which we  have previously reported typically require an average of 18 months to  complete. Task force and senior Navy officials told us that the study was  intended to serve a similar purpose as an AOA, and that they believed  their process was more robust than other AOAs with which they had been  involved. They cited the direct engagement with the fleet representatives,  discussed further below, as a key innovation.
Nevertheless, the task force study differed from an AOA in two ways:
Major defense acquisition programs are required by statute to certify  that they have had an AOA performed consistent with study guidance  developed by CAPE before requesting approval to enter the  technology maturity and risk reduction phase (which begins after  successful completion of a milestone A review) or engineering and  manufacturing development phase (which follows successful  completion of a milestone B review). The task force did not solicit  CAPE study guidance, which is used to prepare an AOA study plan  describing the intended methodology for the management and  execution of the AOA. This guidance is also used to evaluate the final  study to determine whether it met defined evaluation criteria, including  if the methodology was sound and whether the recommendations of  the AOA are supported by the analysis. Senior Navy officials told us  that an executive leadership board helped oversee the task force and  that having a CAPE member on this board equated to similar  involvement. However, CAPE officials involved in the task force study  told us that they were given only limited and brief access to some of  the task force documentation, and only near the end of the process.
Traditional AOAs also require a Joint Staff assessment of proposed  requirements to ensure that the analysis includes only approved  requirements that are valid and unmet by other materiel solutions.  While the task force had the involvement of a senior Joint Staff official  on its executive board, there was no formal Joint Staff assessment of  the requirements.
section_title: Task Force Identified Small Surface Combatant Capabilities and Requirements
paragraphs: Working within its limited timeframe, the task force developed extensive  analyses related to identifying and developing the potential capabilities of  an SSC and subsequent performance requirements. The task force  identified potential missions for an SSC by reviewing existing domestic  and foreign “frigate-like” ships, Navy force structure analysis, the theater  threat environment described by Navy campaign analysis for the 2025  timeframe, and by soliciting fleet feedback.
subsections: section_title: Defining Capability Concepts
paragraphs: The task force initially produced 192 “capability concepts” for an SSC.  These capability concepts consisted of four components: primary mission areas (like SUW, ASW, and anti-air warfare, or enabling capabilities (like range and speed), a concept of operations (describing the roles and tasks an SSC would  be asked to fulfill, such as providing high value unit escort, and  participating in carrier strike group operations), and  concept requirements (specific requirements for an SSC to fulfill the  given capability concept).
In determining capability concepts, the task force also analyzed the  capabilities of the now-retired FFG 7 class of frigates, which were the  most recent U.S. Navy frigate design. In his memo establishing the task  force, the CNO specifically asked the task force to create a baseline of  the capabilities of this ship class.
The task force refined these concepts by considering a broad range of  solutions and then systematically eliminating those solutions determined  to be unsuitable, not feasible, or involving unacceptable risks.
section_title: Fleet Operators Asked to Prioritize Capabilities
paragraphs: ships and attack targets within a larger  range. For SUW systems, area capability  is defined as over-the-horizon.
The task force consulted with Navy leadership and experts, as well as  with fleet operators, to help narrow down the capability concepts. In the  fleet engagement sessions, approximately 60 experienced operators  from both the Atlantic and Pacific Fleets were given a set of performance  capabilities—like speed, range, over-the-horizon SUW capability—and  told to prioritize them. In order to represent resource constraints and  drive prioritization decisions, the task force gave the fleet participants an  ever-diminishing budget represented by poker chips that they could  spend to acquire capabilities. The capabilities were weighted; for  example, ASW, local AAW, and vulnerability improvements were among  the most costly. This weighting process meant that the operators would  have to pass over some capabilities for those they valued more. For  example, the Atlantic and Pacific fleet representatives opted to keep local  AAW capability, even when it meant sacrificing ASW capability. The  operators were then told to do this same exercise several more times, but  they were provided fewer poker chips to represent further resource  constraints. By the third reduction, operators no longer had enough chips  to opt for local AAW or ASW.
section_title: Capability Concepts Narrowed to Eight
paragraphs: Ultimately, this fleet engagement process, coupled with consultation with  Navy leadership, including Commanders of U.S. Fleet Forces Command,  U.S. Pacific Fleet, 3rd, 4th, 5th, 6th, and 7th Fleets and Naval Surface  Forces, helped the task force narrow the 192 capability concepts down to  8. These 8 concepts, depicted in Figure 2, represented a range of  acceptable small surface combatant capabilities, with capability concept 8  being the most capable.
The task force then created top-level requirements documents for each of  the eight capability concepts. These requirements captured the  preliminary SSC requirements for a given capability concept, and  according to the task force could provide the basis for more detailed  requirements development for the selected SSC solution.
section_title: Assessment of Designs and Combat Systems to Meet Capability Options
paragraphs: Secretary Hagel’s February 2014 tasking directed the task force to  investigate potential SSC options based on three categories: (1) new ship  designs, (2) modifications to existing ship designs, and (3) modified LCS  designs. The task force took two approaches to the modified LCS  concepts: minor modifications to each LCS variant, where the dimensions of the  ship were unchanged, and major modifications, where the hulls were lengthened and other  physical dimensions changed.
The task force developed and assessed the technical details of over 600  modified LCS designs.
The task force also conducted a market research survey and issued two  requests for information to industry to solicit inputs on potential  modifications to existing ship designs and combat systems. According to  the task force report, these requests generated responses from 48  companies on 161 systems (including 24 full ship designs), though the  information varied in level of detail and some was too high-level to be  useful without more extensive follow-up. Using this information, combined  with open source research of frigates in service with foreign navies, the  task force identified 23 existing frigate-type ship designs.
For new designs—which provide the most flexibility—the task force used  statistical analysis software to assess the most likely cost and  characteristics of over 19 million potential ship designs. The task force  also produced over 90 cost estimates across the different design  variations.
All designs from each category were assessed on their ability to fulfill one  of the eight capability concepts. According to the task force  documentation, a design was considered technically “feasible” if it could  physically accommodate the systems and equipment on the ship and  retain pre-determined service life allowances for space, weight, power,  cooling, and stability. The task force considered a design “marginally  feasible” if it allowed for adequate space and was able to retain estimated  service life allowances that were less than the design goal but greater  than zero. If there was not adequate space or service life allowances  were zero or worse, the design was deemed “infeasible.”
The task force also conducted an analysis of combat system capabilities,  using in part the information it gathered from the industry request for  information and also information from current Navy systems. In all, the  task force assessed over 50 currently available combat system elements.  These elements included areas such as sensors (e.g., radars and  sonars), command and control systems (e.g., combat management  systems), and weapons (e.g., guns and missiles). The task force then  defined and assessed over 2,300 possible combinations of these combat  system elements to identify technically feasible means of fulfilling the 8  capability concepts. As part of this analysis, the task force identified the  likely weight and power demands of each combination.
subsections: section_title: Task Force Identified Minor Modified LCS as the Least Technically Feasible and Capable Option
paragraphs: As it conducted its analysis, the task force found that a minor modified  LCS (of either variant) was the least technically feasible of meeting any of  the 8 capability concepts among all of design categories that it  considered, as shown in figure 3 below.
An example of an existing design was a modified U.S. Coast Guard  National Security Cutter. The task force found that this option—in addition  to the major modified LCS—could provide a full multi-mission capability,  would provide greater weight and other margins which would allow for  future upgrades, and have greater range and underway days. The  National Security Cutter option could also provide local anti-air warfare  capability.
According to task force documentation, inherent space, weight, power,  and cooling constraints of the minor modified LCS designs prevented this  option from providing the full multi-mission ASW and SUW capabilities  that the task force identified as most valued by the fleet for an SSC. Even  after considering multiple design iterations for each LCS variant (13 for  the Freedom variant and 8 for the Independence variant), the task force  found that it was impossible to fit ASW and local AAW combat systems  on a minor modified LCS hull while retaining necessary weight and center  of gravity margins, which are necessary to ensure that the ship has the  needed stability characteristics.
The task force also determined that a minor modified LCS could not be  modified to the level of vulnerability resistance of the FFG 7 due to LCS  weight and design constraints that would prevent adding more physical  structure. For example, Navy task force officials told us that  approximately 200 tons of additional weight in steel would need to be  accommodated in the LCS seaframe designs if the Navy wanted to  upgrade it from commercial build standards to more robust, Navy-like  specifications like those used for FFG 7. Task force officials told us that  this weight increase would have required a major modification to the LCS  design or a new ship design.
The task force found that the major modified LCS and existing designs  would also need significant modifications to improve their vulnerability  qualities, but unlike the minor modified LCS, these changes were  considered technically feasible. Additionally, the task force found that  none of the existing designs could meet the survivability requirements for  vulnerability and recoverability without extensive redesign, though the  study report does not state if these changes are technically feasible for  each design considered.
section_title: Navy Leadership Directed Task Force to Identify More Feasible Minor Modified LCS Options
paragraphs: In July 2014, near the end of its analysis, the task force briefed senior  Navy leadership that the task force concluded that a minor modified LCS  would be incapable of delivering some of the eight capability concepts.  Task force officials told us that senior Navy leadership directed them to  explore what capabilities might be more feasible on a minor modified  LCS. According to task force officials, Navy leadership told them to only  focus at this point on capability concept 7. As shown in figure 2 above,  this concept did not include a local AAW capability.
Because the minor modified LCS was judged not feasible for capability  concept 7, the task force then had to consider what trade-offs could be  made to create the needed space and weight to develop marginally  feasible options. The task force created two additional minor modified  LCS options for which it would be marginally feasible to meet a revised  version of capability concept 7 that was less capable than the original  concept. These options would retain the modular mission packages  characteristic of the LCS program, but add some systems to provide a  limited multi-mission capability instead of the single-mission capability of  LCS. For example, the task force found that it was feasible to  permanently install an over-the-horizon missile on both LCS variants to  offer over-the-horizon SUW capability, plus a lightweight towed torpedo  countermeasure and multi-function towed array sonar to offer some ASW  capability. But this option would still need to be augmented by an LCS  SUW or ASW mission package to provide the full suite of capability  (adding 30mm guns and Hellfire missiles for SUW, or the variable depth  sonar and torpedoes for ASW). The task force found that it was not  technically feasible to include additional vulnerability capabilities beyond  adding armor protection to some vital spaces.
The task force documentation stated that in developing these alternate  minor modified LCS options, it had to trade some capabilities like speed,  range, and the number of rigid hull inflatable boats the ships could carry.  In some instances, these trade-offs resulted in capabilities equal to or  below the capabilities expected with the current LCS. However, according  to the task force, these trades were thoroughly assessed and deemed  acceptable to the warfighter by the fleet, though the report is not specific  as to how this determination was reached. Table 2 shows several  examples of these trade-offs and how they compare to current LCS  requirements.
In some cases, the trade-offs made to accommodate the minor modified  LCS were significant. For example, during the fleet engagement process,  the operators consistently prioritized a range of 4,000 nautical miles and  30 underway days, and the task force analysis also found that a range of  4,000 nautical miles was needed for an SSC. Accommodating a minor  modified LCS would result in as much as a 30 percent reduction in range,  but the task force did not provide analysis of the operational impact of  reducing the speed and range requirements. It is not clear, for example,  what impact, if any, there would be on maintaining a forward presence  after a reduction in the range and speed. We previously reported that fleet  users in the Western Pacific identified concerns with the current LCS’s  limited range and the demands this might place on the limited number of  refueling platforms.
section_title: By Selecting a Minor Modified LCS, the Navy Prioritized Affordability and Schedule over Higher Levels of Combat Capability Compared to Current LCS
paragraphs: Based on analysis provided by the task force, the Navy recommended— and Secretary Hagel approved—procuring an SSC (termed a frigate)  based on a minor modified LCS. In making its recommendation, the Navy  prioritized cost and schedule considerations over the fact that a minor  modified LCS was the least capable option considered. However, certain  cost assumptions made by the task force may have overstated the minor  modified LCS’ relative affordability as compared to other options. The  Navy’s decision was also based on a desire to start production of the first  frigate in 2019, and without a break in production at the LCS shipyards.  The Navy noted in its recommendation that the minor modified LCS will  provide improvements in combat capability over the current LCS fleet— specifically due to its multi-mission capability. However, the frigate will  have similar capability in most areas as the current LCS; many of the  performance requirements for the frigate are the same as LCS  requirements. As noted, some of the improvements led to lowering some  capabilities for the frigate, such as range. Moreover, a minor modified  LCS will not fully address all lethality and survivability concerns raised by  the former Secretary of Defense. DOT&E identified some of these  concerns in its reporting on the planned frigate program. Namely, the  planned frigate will not have significant improvements to AAW capability  or to reducing the vulnerability of the ship to sustaining damage as  compared to the current LCS.
subsections: section_title: Navy Estimates a Minor Modified LCS Will Cost Less, but Cost Estimate May Overstate Its Affordability Compared to Other Ship Options
paragraphs: In making the decision to choose the minor modified LCS as the new  SSC, senior Navy officials told us that they weighed capability, cost, and  schedule considerations with affordability considerations as a key factor.  In an assessment of the Navy’s decision, USD(AT&L) concluded that  while more capable solutions exist, the Navy could likely not afford a  solution much more costly than what the Navy ultimately recommended.
The task force found that a minor modified LCS has the lowest lifecycle  costs of all the design alternatives it considered. Table 3 depicts the  comparative costs identified in the task force report for the design options  equipped with the mix of combat capabilities ultimately selected by Navy  leadership (referred to as capability concept 7).
The Navy also noted that the minor modified LCS solution would not  negatively impact LCS training and support infrastructure; in its memo  recommending a minor modified LCS option, the Navy wrote that a minor  modified LCS would maximize the operations and support investments  made to date, including shore-based trainers and maintenance facilities,  which would also avoid some potential costs that might be required for  other options.
While large ships and new designs tend to be more expensive than  smaller ships and repeat designs, we found that the task force study’s  cost estimating methodology and assumptions used to create these  estimates may have overstated the affordability of LCS compared to the  costs of other options. This is due to the assumptions the task force made  about: (1) the contracting strategy of maintaining two shipyards instead of  down-selecting to one, and (2) crew size and manning profiles.
First, we found inconsistencies in the task force’s assumptions about  whether the frigate would represent a single, down-selected LCS variant  or whether both LCS variants would be modified. Specifically, the task  force cost analysis assumed that the Navy would select a single variant of  an LCS-based frigate. However, the task force’s separate analysis  examining programmatic plans and considerations for each ship design  concept assumed that the Navy would build both variants of the minor  modified LCS, consistent with the LCS program to date. A lead task force  cost analyst told us that if there were no downselect to a single SSC  variant, costs for a minor modified LCS would be higher for several  reasons: the construction costs for building two—rather than one—lead  ships; reduced quantities of follow on ships for each yard; and the cost of  testing two different hulls. This analyst explained that the task force used  the assumption of a downselect because it provided a simpler cost  comparison. While the task force’s overall conclusion that a minor  modified LCS would be less expensive than the other options is likely  accurate based on the data provided in the workpapers, the magnitude of  cost differential for procurement costs between minor modified LCS and  the other options is overstated in the event that the Navy continues with  two variants. The task force did not document difference because task  force officials told us that it was not a part of their original tasking to  estimate the costs of a non-downselect option, and therefore such  analysis was not conducted or included as a part of the final report.
Second, we found that when estimating the cost of new and existing  designs, the task force made assumptions related to crew size that  resulted in the non-LCS options appearing more costly by comparison.  Specifically, we found that the task force produced a manning estimate  for each design concept, but when it then estimated costs it assigned  crew sizes to the non-LCS options that were considerably higher than  even the upper range identified in the manning estimates. Conversely, the  cost estimators assigned a notional crew size that was within the manning  estimate range for the major and minor modified LCS options. This  approach made the non-LCS design options appear more costly. Task  force officials told us that they chose more conservative manning  estimates for the non-LCS designs than what it initially identified based on  a detailed, bottom-up analysis but  did not provide any additional  information on this analysis.
We also found that while the task force created estimates of potential  crew sizes—including a reduced manning profile—a concept currently  used on LCS as a cost reduction measure—for the ship options, it used  the reduced manning profile to estimate costs for the minor modified LCS  but not for the other options. As a result, the costs of a minor modified  LCS are comparatively less expensive than the other options. The task  force cost analyst told us that they did not estimate these costs for the  other ship options because they did not have enough time.
Manning assumptions have significant implication on costs: crew size is a  significant driver of operation and support costs (which typically make up  around 70 percent of a ship’s life-cycle cost). The task force estimated  that over the entire life cycle of the ship class (assuming 20 ships, with a  25-year service life), a minor modified LCS option would cost  approximately $10 billion less in crew-related expenses than the other  ship design options. This accounts for almost half the difference in  operations and support costs reflected in table 4 (in fiscal year 2014  dollars).
Table 4 shows the comparison in direct and indirect manning costs for  each of the options considered; major modified LCS, and new and  existing designs have the same cost estimates due to the task force  choosing the same manning levels for each of these three options.
According to the task force, these comparisons do not include all  maintenance costs for the minor modified LCS.
The magnitude of differences in these operation and support cost  estimates would likely be reduced if the task force had estimated the  minimal manning concept options on the other design options, though the  Navy did not have the data to quantify this difference.
section_title: Navy Prioritized Speed with Which Minor Modified LCS Could Start Production
paragraphs: In a November 2014 memo in which it recommends selecting a minor  modified LCS, senior Navy leadership also highlighted the speed with  which they believe a minor modified LCS based frigate could be fielded  as a deciding factor in its deliberations, as well as a desire to maintain  stability in the LCS industrial base and vendor supply chain. The task  force report stated that this option could achieve full capability faster than  the others, and with a neutral impact to the industrial base. In particular,  the task force wrote that a minor modified LCS design would provide the  shortest timeline to first ship delivery and that a major modified LCS and  new and existing designs would result in production gaps of 1 to 5 years.
The task force estimated that a frigate based on a minor modified LCS  would be ready to start production in fiscal year 2020. The task force  wrote that other options would not be able to start production until later,  as shown in the table below.
The task force also noted that a minor modified LCS could allow for  incremental upgrades to LCS prior to fiscal year 2019, which offers  capability in the near term that might not be possible on other ships. The  Navy’s November 2014 recommendation memo states that some of these  incremental upgrades may be possible as early as fiscal year 2017.
section_title: Frigate Will Have Survivability Improvements Focussed on Improving Susceptibility, but Will Provide Minimal Vulnerability or Recoverability Improvements
paragraphs: In its November 2014 recommendation memo to the Secretary of  Defense, Navy leadership wrote that a frigate based on a minor modified  LCS will meet the objective of providing a “capable and lethal small  surface combatant with capabilities consistent with a frigate.” This memo  stated that the proposed frigate will have improvements in both  survivability and lethality as compared to LCS. Table 6 depicts some of  the most significant proposed changes.
We found that, while the Navy’s proposed frigate will offer some  improvements over LCS, it will not result in significant improvements in  survivability areas related to vulnerability or recoverability.
subsections: section_title: Multi-mission Capability an Improvement over LCS If Frigate Fully Equipped
paragraphs: The Navy expects to eliminate LCS’s modular mission package concept  for the frigate, and instead equip it with the mission systems from both  SUW and ASW mission packages simultaneously. This would provide a  multi-mission capability that was identified by the task force as a key  characteristic of a frigate and would also provide a capability  improvement over LCS because it will be able to have both SUW and  ASW capabilities embarked at one time. This will improve lethality in that  the ship will be capable of engaging different types of threats at all times,  whereas with the current LCS, the type and degree of lethality depends  on the mission package embarked. However, frigate program officials told  us that the Navy has not yet determined if all frigates will be equipped  with both ASW and SUW mission package equipment at all times, or if  the decision about the mission equipment to be carried will depend on  specific situations or other criteria. If the frigate is deployed without the  equivalent of both mission packages onboard, its combat capability will be  much closer to that of the current LCS.
section_title: Frigate Will Not Provide Major AAW Capability Improvements
paragraphs: The Navy did not select an option that will offer major AAW capability  improvements, though the task force identified that escorting and  protecting high-value units against airborne threats was a typical mission  for an SSC. This type of mission would require an AAW capability beyond  the self-defense capability found on LCS. However, senior Navy  leadership told us that the preferred solution did not need to hinge on a  ship’s ability to provide local AAW defense because destroyers and  cruisers could take care of this mission.
The minor modified LCS selected by the Navy cannot feasibly carry a  local AAW capability with the desired area ASW capability due to physical  limits of the ship. As such, the frigate will have similar self-defense AAW  capabilities to LCS. In addition to carrying the AAW missile system found  on the Independence variant (and already approved for eventual addition  to all LCS), the frigate will add an improved air search radar and  electronic warfare and decoy capability. These improvements should help  reduce the ship’s susceptibility, but the ship will still only retain an ability  to protect itself (like LCS) and not protect other ships.
section_title: Frigate Will Not Provide Major Vulnerability or Recoverability Improvements
paragraphs: The proposed SSC is not planned to have significant improvements to  vulnerability, a component of survivability. The ships will still be based on  a hybrid of commercial and Navy shipbuilding specifications (as are the  LCS), which results in the ship having fewer vulnerability mitigation  features than a ship built fully to Navy specifications. The Navy plans to  add additional armor to the ship magazines and other critical spaces and  to add shock hardening to the AAW missile system. These improvements  will not make the new frigate as survivable as an FFG 7 or a larger  surface combatant, but it will provide some improvement over current  LCS.
In its recommendation memo, Navy leadership wrote that all ships are  vulnerable to damage once hit, and as such they put the first priority on  reducing susceptibility of the frigate to getting hit by weapons. Similarly,  task force officials told us that the fleet engagement process did not  prioritize vulnerability-reducing features to the same extent as primary  mission areas like SUW or ASW.
The task force report discussed how the Navy could employ improved  self-defense capability to reduce the susceptibility of the ship (essentially  destroying or evading threats before they can hit the ship), which could  help compensate for the ship’s vulnerability. Task force officials told us  that this was a cheaper and more feasible means of achieving greater  survivability than increasing the armor, shock hardening, or separation  and redundancy of critical systems. However, the task force did not  provide analysis as to the relative cost of this approach compared to  making vulnerability improvements. The task force also identified that the  concept of operations for any ship can be modified to minimize its  vulnerability (essentially not putting it into situations where it will likely  take damage). While this approach is feasible, we have previously found  that changes in the LCS concept of operations have resulted in LCS  being employable in fewer situations today than it was intended to be at  its inception.
The Navy has not proposed changes to improve the ship’s recoverability,  which it believes is already adequate on LCS. We have previously found  that there are recoverability features on LCS that could be improved, such  as adding a casualty power system or improving system redundancy.  The task force considered other design options that could be less  vulnerable to damage, but these options would cost more and take longer  to begin production.
Senior Navy leadership told us that the Secretary of Defense also  consulted with DOT&E and CAPE officials, as well as the Deputy  Secretary of Defense and the Vice Chief of the Joint Chiefs of Staff. As  part of this consultation, DOT&E officials told us that they were asked by  the Secretary of Defense to independently assess the Navy’s  recommendation prior to the Secretary of Defense making a decision.  DOT&E wrote a report in which it expressed concerns with the Navy’s  recommendation. Similarly, in its January 2016 annual report on weapon  systems, DOT&E pointed out that the vulnerability reduction features  proposed for the frigate provide no significant improvement in the ship’s  survivability as compared to LCS. This report added that, notwithstanding  potential reductions to its susceptibility due to improved electronic warfare  system and torpedo defense, minor modifications to LCS (e.g., magazine  armoring) would not yield a ship that is significantly more survivable than  LCS when engaged with threat missiles, torpedoes, and mines expected  in major combat operations.
DOT&E noted that the proposed frigate design is not substantially  different from LCS and does not add much more redundancy or greater  separation of critical equipment or additional compartmentation, making  the frigate likely to be less survivable than the Navy’s previous frigate  class.
section_title: Frigate Performance Requirements Similar to LCS
paragraphs: Beyond the over-the-horizon missile that is also under consideration for  addition to LCS, the proposed frigate does not add any new offensive  ASW or SUW capabilities that are not already part of one of the LCS  mission packages, so while the frigate will be able to carry what equates  to two mission packages at once, the capabilities in each mission area  will be the same as LCS. The capabilities development document (CDD)  for the frigate, which outlines notional requirements, states that all  existing LCS seaframe requirements will apply to the frigates unless  otherwise specified in the CDD. While specific details are classified, there  are only a few areas where there are differences in warfighting capability  compared to the LCS CDD; specifically, the CDD states that the primary  capabilities that differentiate the frigate from LCS are multi-mission  capabilities and the over-the-horizon missile capability. In addition,  consistent with the task force approach that traded off speed and range  for other capabilities, the Navy is envisioning the frigate to have a slower  maximum and sustained speed than LCS, dropping by several knots  depending on the ship variant (e.g., a modified Freedom or Independence  class). Navy officials have told us that they have determined that the high  top speed of LCS is not essential to mission performance. Frigate  program officials told us that they expect that the range of the frigate will  be improved as compared to LCS because the Navy may be able to add  additional fuel as part of design changes.
The Navy has also re-designated certain requirements related to combat  capabilities—such as SUW and ASW—from Key Performance  Parameters (KPPs) to Key System Attributes. Significant changes in  KPPs must be approved by the JROC; Key System Attributes do not, so  this re-designation allows the Navy to alter the requirements for combat  capabilities as needed to remain within the planned frigate budget and  without seeking approval from the JROC. While specifics are classified,  the Navy’s approach in the frigate CDD is a change in practice from the  LCS CDD. DOT&E, in its January 2016 assessment of the frigate, pointed  out that this change means since some combat capability is not assigned  KPP status the frigate could meet all its KPPs but have reduced combat  capability in other areas.
section_title: Acquisition Strategy Buys More LCS with Unresolved Capability Concerns and Commits to Frigates without Requisite Knowledge
paragraphs: The Navy plans to buy additional LCS in fiscal year 2017, even though  key test events have not yet taken place that would demonstrate whether  the ships will meet needs. In addition, the Navy plans to contract for the  frigate before establishing a sound business case that sets forth realistic  technical, cost, and schedule parameters. The specifics of the current  acquisition strategy, which USD(AT&L) approved in late March 2016,  differ from the plan as set forth in the fiscal year 2017 budget submission.  In the budget, the Navy had planned to release an RFP for the frigate in  fiscal year 2018. The Navy would make a single award for 11 frigates,  with award and construction beginning by fiscal year 2019. Now, under  the March 2016 acquisition strategy, the Navy will request proposals from  the two current LCS contractors for a single LCS in fiscal year 2017 with a  block buy option for 12 additional LCS. The Navy intends to make an  award to each contractor for one LCS, then later use the contract change  process to obtain proposals from each contractor that would upgrade the  block buy option of LCS to frigates. The Navy will evaluate the change  proposals and then exercise the option—now for frigates—on the contract  that provides the best value based on tradeoffs between price and  technical factors. This downselect will occur in fiscal years 2018 or 2019.
Navy frigate program officials told us that these changes were made to  improve affordability. They explained that if they were to only seek  proposals for a single ship from each shipyard in fiscal year 2017, they  would likely receive unfavorable pricing. By combining the fiscal year  2017 ships with contract options for 12 additional LCS, the Navy believes  it will receive better industry pricing. According to the fiscal year 2017  President’s budget, the frigate program will cost over $8 billion through  fiscal years 2019-2025 for ship construction. However, this is based on  procuring 11 frigates, while the current plan is for 12, so the actual cost  will be higher.
Table 7 describes the March 2016 acquisition strategy compared to the  plan in the Navy’s fiscal year 2017 budget request.
subsections: section_title: Acquisition Strategy Results in Buying More LCS with Unresolved Capability Concerns under a Compressed Construction Schedule
subsections: section_title: Extent of LCS Combat Capability Upgrades Uncertain, and Navy Has Not Yet Fully Demonstrated that LCS Meets Survivability Requirements
paragraphs: The Navy plans to make certain upgrades to LCS—similar to those  planned for the frigate—to enable needed improvements to be  incorporated sooner. For example, the Navy is considering adding the  over-the-horizon missile and magazine armor planned for the frigate.  Changes are being considered for addition to upcoming LCS during ship  construction (called forward fit) or sometime after delivery (called backfit).  In announcing the requirement for the Navy to conduct a study for an  alternate small surface combatant, Secretary Hagel stated that DOD  needed to closely examine whether the LCS has the independent  protection and firepower to operate and survive against a more advanced  military adversary and emerging new technologies, especially in the Asia  Pacific. Subsequently, the Secretary recommended changing course from  LCS to buying the more capable frigates. The Navy cited the ability to  make these upgrades to LCS and incrementally improve its capability as  an advantage to selecting the minor modified LCS option over others  studied. In approving the Navy’s recommendation, Secretary Hagel  directed the Navy to provide an assessment of the cost and feasibility of  back-fitting survivability and lethality enhancements on LCS already  under contract, as well as those built before production of frigate  commences, with an intent to improve the lethality and survivability of  LCS as much as practical. Navy officials told us that they requested funds  in the fiscal year 2017 President’s budget to make these upgrades, but  there is no specific identification of these funds or their intended uses in  the budget. Program officials told us that the Navy plans to obtain pricing  on the costs to implement selected frigate survivability and lethality  upgrades on these ships during construction as part of the RFP for the  2017 LCS. According to the LCS program office, the changes that they  will ask the shipyards to price are adding the lightweight towed torpedo  countermeasure and magazine protection; hardening the water system  onboard to better withstand shock; and adding weight and space  allowances for an over-the-horizon missile. The shipyards will also  propose commensurate weight-reduction efforts needed to incorporate  these changes. Implementing these improvements is contingent on both  the affordability of the offers submitted by the shipbuilders and the  technical feasibility of incorporating additional weight to the ship.
Further, the ability to make these upgrades is dependent on the  availability of funds. The Navy told us that a prior request in the fiscal year  2016 President’s budget request for funds to forward fit and backfit LCS  with selected lethality and survivability features was not funded.  Additionally, cost growth in the program will likely limit the availability of  funding for forward fit improvements in the near future. The Navy received  an additional $160 million in fiscal years 2015 and 2016 and plans to  request another $239 million through fiscal year 2020 to complete  construction of ships funded in prior years. According to Navy budget  documentation, this additional funding is needed to cover the  government’s share of shipbuilding contract overruns and restoration of  de-scoped requirements resulting from sequestration reductions. For  fiscal years 2015-2017, of the funding received or requested by the Navy  to address LCS program shortfalls ($246 million), almost 70 percent  ($169 million) was used or is planned to be used to address shipbuilding  contract overruns on 12 LCS seaframes funded in fiscal years 2010-2013.  Additionally, the LCS and frigate programs reported that costs of LCS  currently under construction would increase further due to rising shipyard  labor rate costs following the Secretary of Defense’s directed change in  the procurement quantities of LCS and the frigate, which would result in  fewer ships in the shipyard on which to base overhead costs.
Additionally, in our December 2015 report on LCS survivability and  lethality, we noted that the Navy still had unknowns related to the  survivability and lethality of LCS. Specifically, we identified a number of  events that had not yet been completed, shown in the table below.
Due to these unknowns, we suggested that Congress consider not fully  funding the Navy’s request for future LCS ships beyond fiscal year 2016  given the uncertainties over the long term about the ship’s survivability  and lethality and proposed changes to future ships. These unknowns  remain outstanding.
section_title: Schedule Slips Result in Increases in Near-Term Workload at Shipyards
paragraphs: LCS cost overruns have been accompanied by significant schedule  delays at both shipyards. In 2013, we found that delivery of the two lead  ships and LCS 4-8 were delayed by as much as 2 years due to various  design and construction issues. At that time, the Navy reported that it had  adjusted delivery schedules to account for these delays and did not  envision further delays beyond LCS 8. However, our analysis of Navy  contracting and budget documents identified that actual or planned  deliveries of almost all LCS under contract (LCS 5-26) were delayed by  several months, and in some cases close to a year or longer.  As shown  in figure 4 below, there are 16 LCS (11-26) that are currently slated to be  under construction and delivered from fiscal year 2017 through fiscal year  2021, not including any further ships procured in fiscal year 2017.
These schedule delays mean that the Navy now plans to start  construction of four LCS in fiscal year 2017 (LCS 23-26). Also, during this  same period, the shipbuilders will be working to deliver up to 12 additional  LCS seaframes funded in prior fiscal years (LCS 11-22). This workload  indicates that there is not a schedule imperative to awarding additional  LCS in fiscal year 2017 as the shipyards will both have work remaining  from prior LCS contract awards. According to the Navy, in most cases  shipyard labor skillsets are not translatable from one stage of construction  to another, and loss of production work is felt much earlier than delivery of  the last ship. The Navy’s viewpoint is that pausing production of LCS  would result in start-up delays to the frigate program. However, each  shipyard will start production of two LCS in fiscal year 2017 assuming no  further delays, and this concern does not account for any other work that  the shipyards may have from other Navy or commercial contracts.
section_title: Risks with Frigate Business Case Due to Design, Costs, and Oversight Issues
paragraphs: The Navy’s business case for the acquisition of the frigate is  compromised by unknowns related to the ship’s design, cost, and  program oversight plans. A business case is part of a knowledge-based  approach to acquisition that, in its simplest form, is demonstrated  evidence that the warfighter’s needs are valid and that they can best be  met with the chosen concept, and the chosen concept can be developed  and produced within existing resources—that is, proven technologies,  design knowledge, adequate funding, and adequate time to deliver the  product when it is needed. Our past work on major defense acquisition  programs—including shipbuilding programs—has highlighted a number of  underlying systemic causes for cost growth and schedule delays and has  emphasized the importance of having a sound business case at program  start.
subsections: section_title: Frigate Design Still in Preliminary Stages, with the Acquisition Strategy Postponing Significant Design Work until after the Downselect Decision
paragraphs: Frigate program officials told us that they have been working with the  shipyards for the past year on preliminary design work to determine how  frigate design changes can be accommodated within the space, weight,  and power limitations of each LCS design. The Navy has also concluded  its efforts to identify and select the systems that will go on the frigate; for  example, the Navy selected a new version of Surface Electronic Warfare  Improvement Program system as the electronic warfare system.  However, the Navy faces three challenges to its ongoing efforts to  incorporate frigate survivability and lethality improvements: (1) the  challenge of implementing weight reductions on both LCS variants to  accommodate the frigate changes; (2) incomplete information about the  frigate design available to inform the shipyards’ proposals under the  acquisition strategy; and (3) the Navy’s transition to a contractor-driven  design, which can limit system commonality compared to a more  prescriptive approach where the Navy tells the shipyards what systems  and design features to incorporate.
section_title: Weight Reduction Challenges
paragraphs: First, the Navy and shipyards’ efforts to add additional survivability and  lethality capabilities to the frigate are constrained by weight limitations  affecting both LCS variants. Weight is a critical aspect of ship design  because the total weight of a ship and the locations of weight  concentrations dictate the center of gravity and the stability of the vessel.  As a result, all ships are designed with service life allowances to account  for future weight growth. These allowances provide for the addition of  future capability and weight while providing margin before reaching the  ship’s naval architectural limit, which is the maximum weight a ship can  tolerate while still meeting its stability and survivability requirements.
As we found in July 2014, the Navy has faced challenges managing the  weight of both variants of LCS, and weight growth during construction has  required the Navy to make compromises on LCS 1 and 2 performance.  We also found that because of the LCS’s low service life allowance  requirements for weight and center of gravity compared to other ship  classes, the Navy’s ability to accommodate alterations and growth on  these ships over their expected 25-year minimum service lives will be  significantly more constrained than is typical for other surface ships. The  LCS weight margins are also lower than those called for under Navy  instruction and industry recommended practices. Specifically, LCS has a  requirement to retain a margin of only 50 metric tons of weight, which  translates to just over 1 percent of the total weight, while other ship  classes typically must reserve between 5-10 percent of their total weight  to accommodate future upgrades or equipment changes. In 2012, an  Office of the Chief of Naval Operations instruction highlighted the  importance of weight management across ship classes, noting that  inadequate service life allowances for weight and vertical center of gravity  have resulted in expensive corrective ship changes or in the inability to  modernize ships through installation of new weapons systems.
According to preliminary frigate design documentation, the Navy’s  proposed frigate changes could add significant weight to both variants.  According to the Navy, the Frigate program has directed an increase to  the naval architectural limits of each frigate variant to accommodate the  required frigate capabilities. Additionally, the frigate is not going to have  the same type of mission package swap requirement as LCS, and the  Navy stated that the removal of these requirements allows the shipyards  to change and compartmentalize the large reconfigurable spaces that  typically accommodate mission package equipment. This results in a  design that carries more stability and weight margins, and allows for the  vessels to accommodate added frigate capabilities without a required and  costly corresponding weight removal. Some of the weight reduction  changes will alter the frigate’s performance compared to LCS capabilities.  For example, the Navy is planning a reduction in the size of the rigid- hulled inflatable boats that the ship can carry and deploy. An LCS  configured with an SUW mission package can carry two 11-meter boats  used by boarding teams to interdict other vessels, utilizing specific  launch, handling, and recovery systems to facilitate these missions. On  LCS, the 11-meter boats are in addition to a 7-meter rescue boat. On the  frigate, the Navy is proposing changing the two 11-meter boats to two 7- meter boats, and small boat launching systems to simpler side-launch  boat cranes. This plan could provide significant weight savings for the  Navy. Further, the Navy has applied a reduced endurance range  requirement for the frigate when compared to LCS.
Adding capability to the frigate depends on the success of these and  other design initiatives. It is too early to determine how successful these  efforts will be. If the planned weight reductions cannot be achieved, the  Navy and shipyards will have to identify other weight reduction efforts, or  will have to reduce capability of the frigate. The program office has  already stated that both variants will have less than the required service  life allowance for both power and cooling, but that current power and  cooling needs will be met.
section_title: Limited Frigate Design Knowledge Prior to Downselect Decision
paragraphs: Second, under the approved acquisition strategy, the Navy plans to  exercise a block buy contract option for frigate construction before the  shipyards have initiated detail design. Under an earlier draft acquisition  strategy, the program office would have awarded a contract to each  shipyard in fiscal year 2018 to support detail design of the frigate, which  was to occur before the award of the construction contract for frigates in  fiscal year 2019. With this approach, the Navy would have had detail  design data in hand while considering proposals for ship construction.  The Navy’s approved acquisition strategy now places detail design after  the Navy has contracted for ship construction. This puts the Navy in the  position of having to negotiate the contract target prices for construction  of the lead and follow-on ships without the benefit of information gained  during detail design about the materials and equipment or specific  processes that will be used to construct the ship.
We have previously reported that this type of approach—which is a  common Navy practice that has also been used on other Navy ship  acquisitions—has resulted in increased ship target prices. For example,  for the San Antonio (LPD 17) class ships, the Navy negotiated prices for  the detail design and construction of the lead ship (LPD 17) and the first  two follow-on ships (LPD 18 and LPD 19) at the same time. By  negotiating target prices for these ships before detail design even began,  target prices for these three ships did not benefit from information gained  during detail design. An alternative approach would be the Navy’s original  plan, which was also used on the Virginia class submarine program  where the Navy negotiated detail design separately from construction,  thus benefitting from the knowledge gained from detail design in  negotiating prices for construction. The Navy also plans to use this  approach with the Ohio class replacement submarine program and  intends to have a high level of design complete prior to the award of the  lead ship construction contract. Assuming it continues to employ a block  buy approach for the frigate as it has on the LCS program, the Navy will  have to request funding for at least detail design and lead ship  construction in its fiscal year 2018 President’s budget request. The  Navy’s request would be based on target prices that it negotiated in the  absence of detail design information, which affects the realism of the  budget request.
section_title: Contractor Driven Frigate Design May Reduce Commonality
paragraphs: Third, the Navy is also transitioning to a less prescriptive design approach  under which the shipyards have more latitude in proposing design  approaches and equipment than was initially planned. Frigate program  officials told us that they had initially planned on giving the shipyards a  more prescriptive set of design parameters with specific systems  identified that the shipyards would need to incorporate into their designs.  Program officials told us that they are adjusting this approach; now it will  be similar to the original LCS program, whereby the shipyards were given  performance specifications and requirements. The shipyards then  selected the design and systems that they felt best met these  requirements, but that were also the most affordable and best suited to  fitting their design in a producible manner.
Program officials told us that this new approach should yield cost  efficiencies. They told us that they are transitioning from a plan where the  government would furnish some frigate equipment to having the  contractors furnish equipment, which they believe allows the shipyards to  potentially secure better pricing for systems such as the air search radar.  A similar approach was used during initial LCS design; in some instances,  this led to the ships having non-standard equipment, making the ships not  common with either one another or the rest of the Navy.
subsections: section_title: Frigate Costs Remain Uncertain
paragraphs: According to the fiscal year 2017 President’s budget request, the Navy  estimates almost $10 billion for the remaining LCS and frigate  procurements, with the lead frigate expected to cost $188 million or  approximately 30 percent more than the single LCS requested in fiscal  year 2018, and follow-on frigates in 2020-2021 closer to an increase of 20  percent more per ship. Program officials said that the acquisition strategy,  which would downselect to a frigate as early as fiscal year 2018, but no  later than fiscal year 2019, is contingent on securing additional funding a  year earlier than planned. The Navy, however, does not yet have a  complete estimate of frigate costs. The Navy had planned to approve its  frigate service cost position—which is the Navy’s cost estimate for the  program—in late 2015. However, as of February 2016, the frigate  program office told us that it needs to revise its estimate due to the  Secretary of Defense’s 2015 direction to reduce frigate procurement  quantities. As a result, the Navy currently does not have an approved cost  estimate for the frigate. Navy officials told us that they expect the frigate  to cost no more than 20 percent—approximately $100 million—more per  ship than the average LCS seaframes. However, we were unable to  assess this cost as the Navy did not provide us the basis for its estimate  and has not yet completed its estimate.
The Navy has also not yet determined the quantity of mission package  equipment that will be required for the frigate, which will be another cost  element. Unlike LCS, the frigate concept does not entail readily  interchangeable mission packages to provide single mission capability;  rather, the multi-mission functionality will enable the frigate to carry both  SUW and ASW equipment simultaneously. However, as noted above,  frigate program officials told us that they have not yet decided if every  frigate will be equipped with all mission equipment at all times, or if the  Navy will buy a smaller subset of equipment for the frigates to share as  they deploy. The Navy had planned to buy 64 LCS mission packages, but  a senior Navy official and a mission packages program official told us that  this will change based on the Secretary of Defense’s 2015 direction.  Additionally, frigate program officials told us that four systems—the  variable depth sonar, the 30mm gun modules, the airborne torpedo, and  the surface-to-surface missile module—will not be funded with  shipbuilding procurement money but that they will instead be funded from  other procurement accounts. Therefore, the more than $8 billion expected  for frigates does not include the costs for these three systems for any of  the frigates.
section_title: Oversight Structure for Frigate Acquisition Remains Undetermined
paragraphs: According to officials from the Navy and OSD, the precise oversight  structure for the frigate acquisition has not yet been determined, although  the Navy established a frigate program office over a year ago and the  office has received congressional appropriations. The frigate program  office is under the purview of the LCS Program Executive Office, which  oversees the LCS seaframe and mission packages program offices,  among other offices. The Navy also assigned a new system  designation—FF—specific to the frigate and received procurement and  research and development funds within the LCS fiscal year 2016 budget.  In the President’s fiscal year 2017 budget request, the Navy created a  new budget line item for research and development funds and included  frigate procurement cost information within the LCS procurement budget  line.
Navy officials, including frigate program office officials, told us that they  will develop some key requirements and acquisition documentation, but  that they do not envision formal frigate milestone reviews. Frigate  program officials told us that a determining factor of whether or not they  will be able to procure the lead frigate in fiscal year 2018 instead of 2019  is if the frigate design is matured to a sufficient level to allow the  shipbuilders to submit proposals for the frigate upgrade with minimum  risk. However, when we asked the program office how it would evaluate  the maturity of these designs before down-selecting to the winning  shipyard, the program office described an iterative review process but  with no formal milestone or event like a preliminary design review to  approve readiness to proceed. The Navy’s approved acquisition  strategy—which we obtained while DOD was reviewing our draft report— states that OSD will hold reviews called “in process reviews” in fiscal  years 2016 through 2025; according to frigate program officials, the Navy  plans to combine the frigate and LCS program reviews into this annual  review. The acquisition strategy does not provide details on the nature  of these reviews, including requirements and timing. At this time it is  unclear if one of these reviews will approve the release of the RFP for the  fiscal year 2017 LCS and the request for contract change proposals for  the frigate upgrade, and if another will be held to approve modifying the  2017 LCS contract to exercise the option for a block buy of 12 additional  LCS with the frigate upgrades.
Frigate program officials also told us that they do not intend on  completing all the documentation that would normally be required of  major weapon system programs at the system development phase,  including developing an independent cost estimate for the frigate  program. Major defense acquisition programs, including acquisition  category (ACAT) I programs like the Navy’s LCS and frigate programs,  are defined as such based on anticipated expenditures. Even with the  Secretary of Defense’s reduction in quantity of ships, the expected dollar  value of frigate seaframe procurement alone, which according to the  Navy’s latest budget submission exceeds $8 billion in current dollars,  makes the frigate acquisition equivalent to a major defense acquisition  program with ACAT I status. ACAT I programs generally go through a  series of phases as they progress from the identification of the need for a  new capability, through initial planning of a solution, to system  development, and finally production and deployment of the fielded  system. At Milestone B, which commonly corresponds to the start of detail  design for ship programs, major defense acquisition programs are  required to have approved requirements, an independent cost estimate,  and an acquisition program baseline which includes parameters to  describe the cost estimate, schedule, performance, supportability, and  other relevant factors. Additionally, major defense acquisition programs  begin tracking unit cost changes and report unit cost growth against  Nunn-McCurdy statutory thresholds and are required to periodically report  to Congress in Selected Acquisition Reports (SAR), a key source of  program information on cost, schedule, and performance progress.
The Navy’s approved acquisition strategy does not describe specific  documentation that the Navy will be required to submit for OSD approval.  Frigate program officials have stated that they do not intend on soliciting  an independent cost estimate from CAPE, and officials were unclear on  how or if they would generate a frigate-specific acquisition program  baseline or break out the frigate in SAR updates. We have previously  reported that milestone requirements form the basic oversight framework  to ensure that Congress and DOD decision makers are adequately  informed about the program’s cost, schedule, and performance progress.  While DOD acquisition policy does allow for decision authorities to tailor  information requirements and the acquisition process to achieve cost,  schedule, and performance goals, the risk of prematurely committing  resources to the frigate before certain knowledge is attained will remain  until the Navy or OSD establishes a process through which the frigate will  be subject to acquisition criteria in the same manner as other major  defense programs. Without requiring the new frigate program to have a  formal review prior to awarding the frigate contract or to prepare key  program documentation such as those cited above, decision makers may  lack information on program cost and technical baselines on which to  base oversight of the program.
section_title: Conclusions
paragraphs: We and others, including the former Secretary of Defense and DOT&E,  have raised significant concerns about whether the LCS provides the  Navy with needed capabilities. In response to its own concerns about  LCS’s combat capabilities, the department concluded that improvements  are necessary. In the past, we have recommended that LCS  procurements be paused while needed testing took place. The Navy has  cited reluctance to do so due to concerns about the industrial base;  specifically, keeping the two LCS shipyards in business. The continued  delays in production of LCS lessens this concern as a factor in the timing  of the frigate production start. The LCS delays, coupled with the absence  of planned upgrades to the two planned LCS in fiscal year 2017 that  would help mitigate some of the capability concerns and the persistent  unknowns with LCS combat capabilities, suggest that it is reasonable to  again consider a pause in production. The delays facing LCS already  under contract mean that the shipyards have ongoing LCS work through  fiscal year 2021. Not buying the proposed ships in 2017 would provide  the Navy and OSD time to buy the ships in an upgraded frigate  configuration that is more in line with the capabilities approved by the  former Secretary of Defense and complete further LCS testing.
As the Navy pivots from LCS to the frigate—which is expected to provide  some enhanced capabilities over the current LCS—there are many  unknowns with regards to cost and the design of the frigate, and sufficient  oversight structures are not yet defined. The recently approved  acquisition strategy for the frigate reflects an accelerated approach.  Specifically, the Navy would now award a construction contract for the  frigate before having sufficient knowledge of the ship’s detail design. This  situation is not consistent with best practices and puts the taxpayer at risk  of paying for cost overruns.
Further, the planned oversight of the frigate program could be enhanced  by requiring the Navy to develop key oversight documents related to cost,  capability, and schedule; at the most basic level, these would include an  independent cost estimate, an acquisition program baseline, and a plan to  incorporate the frigate into SARs. Without these documents or a  milestone review, the program will not be subject to key statutory and  regulatory oversight requirements, such as providing Congress with  regular, formal reports on program cost and schedule performance that  are specific to the frigate program. Such information is needed to hold this  multi-billion dollar program accountable for achieving its cost, schedule,  and performance requirements, once they are defined. Further, aligning  OSD-level reviews of the program with key decision points—including  approving the release of the request for contract change proposals for the  frigate upgrade and the frigate downselect—would offer an important  oversight mechanism.
While we are making new recommendations, we also believe that the  prior recommendations we made about LCS in our recent past work  would enhance the Navy’s knowledge about LCS capabilities prior to  committing additional funds.
section_title: Matters for Congressional Consideration
paragraphs: Congress should consider not funding any requested LCS in fiscal year  2017 because of unresolved concerns with lethality and survivability; the  Navy’s ability to make needed improvements; and the current schedule  performance of the shipyards.
Congress should also consider directing the Navy to submit a revised,  OSD-approved acquisition strategy under which it completes a significant  portion of detail design for the frigates prior to soliciting proposals for the  frigate upgrade package.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Defense take the following two  actions:  1.  Ensure that there are OSD-level reviews scheduled to assess the  Navy’s level of knowledge prior to key events, such as the Navy  releasing the request for modification proposals for the frigate  upgrade and committing to a frigate downselect decision.  2.  Before the downselect decision for the frigates, require the program to  submit appropriate milestone documentation as identified by OSD,  which could include an Independent Cost Estimate, an Acquisition  Program Baseline, and a plan to incorporate the frigate into SAR  updates.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. Its  written comments are reprinted in appendix II of this report.  DOD  concurred with one of our recommendations and partially concurred with  one.
Originally, our draft report contained three recommendations to DOD; the  department concurred with one and partially concurred with two.  However, due to events that occurred while our draft report was out for  comment, we have deleted one recommendation from this report.  Specifically, we had planned to recommend that DOD not approve the  Navy’s planned acquisition strategy for the remaining LCS and frigates,  because it had shortcomings, outlined in this report, which presented  risks. However, after we sent the draft report to DOD on April 15, 2016 to  review, we were notified that USD(AT&L) had approved the acquisition  strategy on March 29, 2016. We requested this document several times,  but were told it was pending approval. Despite our pending request and  the document being approved in March, we were not provided a copy  until May 2016. Since the department has already approved the  acquisition strategy and it does not fully address the concerns we raised  in this report, we have converted our recommendation into a Matter for  Congressional Consideration.
DOD agreed with our recommendation to ensure that OSD-level reviews  are held to assess the Navy’s level of knowledge prior to key events.  DOD noted that the department already plans to conduct annual OSD- level reviews of the LCS and frigate program, stating that coordinating  future program reviews with key acquisition decisions is standard  practice. DOD also stated that the Navy would be required to return for an  additional review in advance of releasing the fiscal year 2017 request for  proposals that will inform the frigate down select, and that OSD will  participate in peer-review of the request for proposals for the 2017  procurements and 2018 downselect. While these are positive steps,  neither the department’s response nor the approved acquisition strategy  elaborate on the specific requirements for these reviews or any specific  documentation requirements. To make these mechanisms effective, OSD  would need to ensure that these reviews occur regularly and in advance  of key decision points, including prior to committing to the frigate  downselect. Further, we would expect that these reviews would include  submissions of updated key documentation such as a Test and  Evaluation Master Plan.
Regarding our recommendation on milestone documentation for the  frigate, DOD partially concurred, stating that the Navy views the LCS  transition to the frigate as an incremental upgrade. DOD stated that the  Navy would be required to provide key documentation related to the  seaframe, including an independent cost estimate and an updated  acquisition program baseline, though DOD did not provide specific  timeframes for when these documents would be submitted, nor is this  information contained in the approved acquisition strategy. DOD stated  that the Navy is also required to provide updated mission package  quantities, with an updated mission packages acquisition program  baseline, as well as further analytical reports on the capabilities and  quantities of the mission packages. We believe these are important steps,  but that it is important that this documentation is provided in advance of  investment decisions. We also believe that to provide visibility over  frigate-specific cost and schedule performance, OSD should require the  Navy to report frigate cost and schedule baselines as a separate section  of the SAR and acquisition program baseline instead of aggregated into  the baseline LCS SAR and acquisition program baseline data, as they are  presented now. Such reporting would better facilitate oversight of cost  and schedule variances for both efforts. While the Navy sees the frigate  as an incremental upgrade, separate reporting is consistent with DOD  provisions that describe increments of capability that are designated as  subprograms.
DOD also separately provided over 50 technical comments on our draft  report. We incorporated the comments as appropriate, such as to provide  additional context in the report. In doing so, we found that the findings  and message of our report remained the same. In a few cases, the  department’s suggestions or deletions were not supported by the  preponderance of evidence or were based on a difference of opinion,  rather than fact. In those instances, we did not make the suggested  changes.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, and the Secretary of the Navy,  and other interested parties. In addition, the report is available at no  charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at 202-512-4841 or mackinm@gao.gov. GAO staff who made key  contributions to this report are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the task force’s process and key information, we analyzed  Navy and task force documentation, including the final report, classified  and unclassified appendices, working papers, and senior leadership  briefings. We also met with the task force study director and several study  team lead analysts on several occasions, and received briefings on their  process. We consulted with Navy and Department of Defense (DOD)  subject matter experts on study inputs and conclusions. For example, we  met with and obtained written responses from a lead task force cost  analyst from Naval Sea Systems Command Costing Engineering and  Industrial Analysis Division, and Office of the Secretary of Defense (OSD)  officials from the Office of the Under Secretary for Acquisition,  Technology & Logistics (USD(AT&L)), Director Cost Assessment and  Program Evaluation (CAPE), and Director, Office of Test and Evaluation  (DOT&E). To evaluate the extent to which the task force study compares  to an analysis of alternatives we compared the task force’s study and  methodology to relevant DOD acquisition guidance, including the DOD  5000.02 instruction. We also discussed the type of analysis that would be  typical of an Analysis of Alternatives (AOA) with CAPE and senior Navy  and OSD officials. We also consulted with a GAO methodologist on the  study methodology, and a GAO economist on cost issues.
To examine how the Navy arrived at its preferred solution of a modified  Littoral Combat Ship (LCS) for its future small surface combatant (SSC)  and the extent to which the Navy’s solution will address survivability and  lethality concerns, we analyzed relevant Navy, DOT&E and CAPE studies  and reports and the Navy’s draft frigate requirements documentation. We  met with Navy and OSD officials, including officials from both the LCS  seaframe and frigate program offices, Navy’s Surface Warfare directorate  (N96) and DOT&E, to discuss the Navy’s proposed design and  capabilities for the frigate. We also met with the Assistant Secretary of the  Navy for Acquisition, Technology, and Logistics and the Deputy Assistant  Secretary of the Navy for Ships, as well as the Deputy Assistant  Secretary of Defense for Tactical Warfare Systems. We also compared  LCS requirements with the Navy’s draft proposed capabilities for the new  frigate to identify any differences. To understand OSD’s intent when  directing the Navy to conduct the study and restructure the LCS program  in 2014, we met with OSD officials including a former senior OSD official  who helped draft the direction to the Navy.
To address any potential risks associated with the Navy’s approach to  acquiring the frigate, we assessed Navy-provided weight reduction  initiatives and descriptions of frigate upgrades. We also met with  representatives from Austal USA and received written responses to  questions from Lockheed Martin. We also reviewed the draft frigate  acquisition strategy documents and compared with GAO-identified best  practice standards for using knowledge to support key program  investment decisions. Additionally, we compared the Navy’s strategy  against relevant DOD policy, including DOD Instruction 5000.02, and met  with officials from OSD AT&L to discuss the frigate acquisition strategy.  We discussed the proposed acquisition approach to the frigate with the  Navy. We met or received written input from task force leadership, the  frigate and LCS seaframe program offices and officials from the office of  the Navy Acquisition Executive—the Assistant Secretary of the Navy,  Research, Development and Acquisition. To identify the extent to which, if  any, LCS production trends will impact the Navy’s plans for the frigate  program, we analyzed LCS contract and contract modifications  documents and Navy Supervisor of Shipbuilding cost and schedule  performance production data related to for LCS currently in production.
We conducted this performance audit from April 2015 through June 2016  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, and that the data we obtained  and analyzed are sufficiently reliable for the purposes of our assessment.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Diana Moldafsky (Assistant  Director), Pedro Almoguera, Jacob Leon Beier, Lorraine Ettaro, Laura  Greifner, Kurt Gurka, Kristine Hassinger, Kate Lenane, C. James Madar,  Roxanna Sun, and Christopher J. Yun made key contributions to this  report.