Dec 03 2009

Shelby: Cost Cannot Be Only Factor in LCS Buy

U.S. Senator Richard Shelby (R-Ala), along with other Alabama delegation members today sent a letter to the Secretary of the Navy regarding their concerns with the Navy’s Littoral Combat Ship (LCS) acquisition strategy.

“Our men and women in the armed forces deserve no less than the best, most capable equipment available for them to carry out their operations,” said Shelby.  “It is unfathomable that the Navy would structure an acquisition competition that failed to consider the technology that could help save the lives of our men and women in uniform, yet it has. Unfortunately, it will be detrimental to the ones who rely on this equipment the most, our warfighters.”

On Sept. 16, 2009, the Navy announced cancellation of the current acquisition strategy for the LCS and is instead focusing on a new buying strategy that once again comes at the expense of additional capability.  The Navy has stated its intention to run this competition based solely on price. 

The full text of the letter is below.  A scanned copy is attached.

Thursday, December 3, 2009

 

The Honorable Ray Mabus
Secretary of the Navy
1000 Navy Pentagon
Washington, DC  20350-1000

Dear Secretary Mabus,

We are writing to express serious concerns regarding the Navy’s Littoral Combat Ship (LCS) acquisition strategy.  We strongly urge you to evaluate the LCS designs through a modified best value selection methodology.

The draft Request for Proposal emphasizes cost as the decisive factor in the design decision, placing technological advancements as secondary criteria.  This means that price is more important than quality and that performance is not a critical factor.  Additional capabilities of the ships - technology that could help save the lives of our men and women in uniform - are not a key consideration in the decision.  The draft Request for Proposal has the competition structured to buy the cheapest ship without consideration of any other factor.  If this procurement process is ultimately utilized for the final Request for Proposal, it is abundantly clear that the less capable offering will be selected. 

Further, it appears the Navy does not plan to evaluate the cost differential between the two designs’ life cycle costs.  We believe upfront acquisition cost of the LCS must be balanced against total ownership cost.  Acquisition decisions made in the near future will affect fleet effectiveness and operating costs for decades to come. Therefore, total ownership cost, including fuel efficiency, should be a critical factor of competitive cost evaluation.

Finally, the contract for LCS 1 was awarded 10 months earlier than the contract for LCS 2.  LCS 1 has completed more of its construction, industrial post delivery period, and test and certification program than LCS 2.  As a result, one team has significantly more information about the performance of its ship and recurring cost of correcting its deficiencies.  This creates an uneven playing field and significantly more risk for the team that had its construction contract awarded second.  Given the clear disparity in information, this issue must be rectified prior to the final release of the Request for Proposal.

Our primary interest is to ensure that the capabilities of our naval fleet are the very best and that our armed forces receive the equipment they need in executing future operations.  As the foundation of our ability to project force globally for the next half century, we must obtain the best platform for the taxpayer investment.  The procurement strategy cannot allow cost to come at the expense of additional capabilities for our sailors.
                                                                       
Sincerely,