LCS: Stop Work Order

First of all, someone make sure Byron is sitting down and has his smelling-salts handy. Byron, there are a lot of folks that owe us a beer on this one.

Scrambling to regain control of Littoral Combat Ship program costs and forestall a congressional firestorm, Navy leaders have called for a temporary halt on construction on the third LCS while examining why cost growth on the first one has jumped as much as 86 percent.

A recent cost review of the USS Freedom showed that the estimated price had jumped from a planned $220 million to between $331 million and $410 million

BTW, that is for a ship without its "mission module" i.e. can't do a mission outside its basic kit.

“It appears that we’re having considerable cost overruns on it,” Delores Etter, the Navy’s top acquisition officer, told reporters Jan. 11. “We don’t know the numbers.”

Etter spoke a week after deciding to reassign the program executive officer for ships, Rear Adm. Charles Hamilton, to a position outside the Naval Sea Systems Command. Sources said the reassignment was not due solely to problems with the Littoral Combat Ship.

Yes, something that I have asked a long time about: who has been fired? Someone please find a photo of RADM Hamilton and photoshop it to look like a head on a pike and email it to me; I would like to post it. (nothing personal sir, not even professional - you are a great Admiral and leader - and it may not be related at all - but a firing is needed, though it isn't your fault - you did the best with the hand you were delt. Others should fall first - but it is what it is) Ms. Etter - I hope you are next. If you don't know the numbers, who does? Her head on a virtual-pike as well.

CYA and fingerpointing is going on like mad here and here.

Although Navy officials declined to cite specific factors leading to price hikes on the Freedom, Lockheed spokesman Craig Quigley cited a number of reasons.

-- The first ship in a new class historically experiences cost increases as shipbuilders learn the best ways to build the ships. Quigley noted that numerous representatives from the Bollinger shipyard have been in Marinette “to learn those lessons so we don’t learn them again.”

-- Vendor issues. Quigley noted that mistakes by General Electric in manufacturing the ship’s reduction gears slowed the schedule. It was also tough to get the right kind of steel, which was also being ordered by the Army to up-armoring vehicles in Iraq.

--The Navy’s new Naval Vessel Rules, changed in 2004 to to standardize and strengthen ship construction requirements. Quigley said, “The tightened NVRs will make a tougher ship. But there is an impact on cost. It is particularly relevant when you’re adapting a commercial design to a naval warship.” Lockheed’s hull form is based on a large, commercial, Italian-designed yacht.

--A fast-track acquisition program that puts ships into production while design work still is going on. “The Navy and Lockheed Martin always knew this was going to be an element of moving a ship along this fast,” Quigley said.
...
According to Lockheed, several issues raised costs including incorrect reduction gears supplied by vendors, a six-month delay in receiving high-grade steal and the Navy's decision to apply standard vessel production rules when constructing the ships.
...
"We believe these increased costs are due to an underestimation of labor hours," said Lt. John Gay, a spokesman for the Navy,
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According to Lockheed, several issues raised costs including incorrect reduction gears supplied by vendors, a six-month delay in receiving high-grade steal (sic) and the Navy's decision to apply standard vessel production rules when constructing the ships.

Oh, yes. "high-grade steal" indeed. Dr. Freud would be proud.

Oh, this is rich. Just priceless.

Lockheed declined to provide further comment on how much the company was over budget.

Quigley said preliminary estimates of the "stop work order" would cost the defense contractor roughly $14 million to manage the shut down and could lead to job cuts.

"We would likely seek to recover those costs from the Navy," said Quigley.

SECNAV Winter: Bravo Zulu; more heads please.

Big time Hat Tip to Eagle1.