Navy Littoral Combat Ship (LCS) Program: Background, Issues, and Options for Congress

The Littoral Combat Ship LCS is a relatively inexpensive Navy surface combatant equipped with modular plug-and-fight mission packages. The Navy wants to field a force of 55 LCSs. The first two LCS-1 and LCS-2 were procured in FY2005 and FY2006 and were commissioned into service on Nov 8, 2008, and Jan 16, 2010. Another two LCS-3 and LCS-4 were procured in FY2009 and are under construction. Two more were procured in FY2010, and the Navys proposed FY2011 budget requested funding to procure another two. Navy plans call for procuring an additional 16 in FY2012-FY2015 at a rate of four ships per year. There are two very different LCS designs -- one developed and produced by an industry team led by Lockheed, and another developed and produced by an industry team led by General Dynamics. On Sep 16, 2009, the Navy announced a proposed acquisition strategy under which the Navy would hold a competition to pick a single design to which all LCSs procured in FY2010 and subsequent years would be built i.e., carry out a design down select. Section 121a and b of the FY2010 defense authorization act H.R. 2647P.L. 111-84 of Oct 28, 2009 provided the Navy authority to implement this down select strategy. The Navys down select decision was expected to be announced by Dec 14, 2010, the date when the two LCS bidders bid prices would expire. On Nov 3, 2010, the Navy notified congressional offices that it was prepared to implement an alternative dual-award acquisition strategy under which the Navy would forego making a down select decision and instead award each LCS bidder a 10-ship contract for the six-year period FY2010-FY2015, in annual quantities of 1-1-2-2-2-2. The Navy stated that, compared to the down select strategy, the dual-award strategy would reduce LCS procurement costs by hundreds of millions of dollars. The Navy needed additional legislative authority from Congress to implement the dual-award strategy.